MANAGER
The powerful grocery players have a great interest in the status quo. We should not trust that it is good for consumers.
NEW PRICE SHOPPING: On 1 February, a price increase has been announced for a number of food products. Too little competition can cause them to increase more than necessary. Photo: Lars Eivind Bones / Dagbladet
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Manager: This is an editorial from Dagbladet, and expresses the newspaper’s view. Dagbladet’s political editor is responsible for the editorial.
It’s Wednesday this week heralded a sharp jump in food prices. It comes on top of a price increase of 11.5 per cent over the past year.
1 February is one of two annual “price windows” where prices are adjusted from manufacturers to grocery stores. Then it is expected that the prices will be increased at the supplier level, and thus for all sun brands also on the shop shelves.
It is of course completely natural that prices go up in the shop when it becomes more expensive to have the food produced and delivered. The big question, however, is whether they will increase more than what is “necessary”, i.e. whether the grocery chains will increase prices to make up for increased costs – and then some more.
All eyes will be on the price tags this week, because most of us feel the price increase well in our wallets. There are not least good reasons to look into the grocery industry. It has a lot to answer for at the moment.
Should be dirt cheap
Over the past few years, attention to competition in the grocery market has received extra attention. In 2020, the Norwegian Competition Authority announced billion-dollar fines to the three large food giants – Coop, Norgesgruppen and Rema 1000 – for using so-called they swear. The hunters monitored the shelf prices of their competitors, and the Norwegian Competition Authority fears that this led to price coordination, not price competition. As a result, food prices may have been higher than they should have been if the competition had worked.
Now the grocery chains no longer employ price hunters, but there are still good reasons to look at whether the competition is good enough.
Not least, the government has cracked down harder on price discrimination between the small and large chains. Large chains have been able to negotiate more favorable prices for the purchase of goods that the small ones have not had access to. As a result, it has been difficult to gain entry into a market dominated by a small number of players. It weakens new establishments and competition for customers.
It is good that the government has announced stronger supervision and action towards the grocery industry. The signals have nevertheless been mixed. Just before Christmas 2021, the Minister of Agriculture was concerned about the price war between the shops. – I think it is pointless to wage a price war on seasonal goods in the way that the chains still doshe told VG after seeing that the kilo price of kohlrabi was down to NOK 2 and 90 øre.
It should not be the political signal being sent. Norwegian food is too expensive – not too cheap. Poor competition and a few players who dominate the entire market are largely to blame.
