The government has i The Hurdal platform announced that they will phase out the competition-promoting measures in the dairy sector.
The Norwegian Competition Authority warns against this.
– We believe that competition in the dairy sector is weak and that it should be strengthened. And then we think it is absolutely wrong to remove the competition-promoting measures, says deputy head of the department for food, trade and health in the Norwegian Competition Authority, Magnus Friis Reitan
74 percent market share
In short, the measures are about smaller players are supported to be able to compete with Tine, which has a 74 per cent milk market share.
The measures are evaluated every five years. According to one report from the Directorate of Agriculture have the measures helped the competition.
– Normally, the Norwegian Competition Authority is skeptical of subsidy schemes, but in this market there is a clear need for measures that can strengthen competition. We therefore recommend the continuation of the competition-promoting measures, says competition director Tina Søreide in a press release.
She says mThe owner-occupied market is a large and important market for Norwegian consumers.
Despite 20 years of support, competition in the market is considered fragile by the Norwegian Competition Authority.
– High market concentration, Tine’s strong position and high barriers to entry indicate that competition in the dairy markets is still weak. In order to maintain the competition for cheese and milk in Norway, this general subsidy should not only be kept, we should also consider increasing it, says Friis Reitan.
ASSESSES: Agriculture and Food Minister Sandra Borch visiting farmers in Vestfold in May 2022.
Photo: JOHN-ANDRE SAMUELSEN / JOHN-ANDRE SAMUELSEN
Borch will assess the measures
The government will gradually phase out the competition policy measures from the scheme, confirmed Agriculture and Food Minister Sandra Borch in the Storting recently.
– The government has not said that all the measures should be phased out at once, but we must look at the individual elements that the Directorate of Agriculture has included in the report, said Borch, according to E24.
The right-wing parliamentary representative Lene Westgaard-Halle said in the same debate that she was concerned about increased prices. She explains to NRK:
– It appears as if the government is more concerned with ideology than ensuring a value chain for groceries that works well. The Conservative Party is concerned that removing measures that provide competition means more expensive food and poorer choice for ordinary people, says Westgaard-Halle.
Tine does not agree with this description of reality, and says they want competition on equal terms.
– If the authorities want milk production throughout the country – and a vibrant Norway, then our competitors cannot continue to receive centralizing special subsidies of NOK 200 million a year, writes communications director at Tine, Ingrid Wilberg Arnesen, in an email to NRK.
Hope the food minister follows up
She believes the other milk producers have some clear competitive advantages.
– Today, our competitors can order the milk they want from us, without raw material risk – and at the same price as us. Together with the special subsidies, this gives them a clear competitive advantage.
What does Tine hope the Minister of Agriculture and Food will do?
– We have confidence that the government will follow up on the Hurdal platform and remove these special subsidies, so that we and our competitors can challenge each other on innovation and diversity for the consumer – on equal terms.
Can be hit
A possible removal of the measures would be bad news for Q dairies, Synnøve Finden and Røros dairies.
Aksel Mjøs is head of the department of finance at the Norwegian Business School. He is too chairman of the Kavlifondet (non-profit foundation), which owns the Q dairies.
He says that the current subsidy schemes are absolutely necessary to maintain competition.
– The clearest signal that it is demanding to be a challenger in this market is that there are no newcomers who have invested heavily in the last 15 years, says Mjøs.
NRK has not been able to get a comment from Agriculture and Food Minister Sandra Borch.
