Government blames food retailers for high prices

Food prices too high, selection too poor? Blame the food retailers, says a new government study.

Food prices too high, selection too poor? Blame the food retailers, says a new government study.

The government-appointed Food Chain Committee has presented its findings and, as expected, holds retailers responsible for the high food prices and poor assortment in Norwegian stores.

The committee says its findings show that, over time, Norway’s four major food retail chains have increased their power relative to the other links in the value chain.

“The Food Chain Committee identifies important challenges relating to power relationships, transparency and information on market mechanisms and products. I would like Norwegian consumers to have a broader selection and greater diversity in stores in the future. This study contains several interesting proposals with this in mind,” says Audun Lysbakken, Minister of Children, Equality and Social Inclusion.

“We appointed this committee to find solutions that can increase confidence among consumers, and we are willing to follow up with political action to achieve those targets,” Lysbakken says.

The committee proposes introducing legislation to ensure fairness in negotiations and good trade practices. The law will ensure consumers reasonable prices, wide selection, good quality and easy availability. To ensure enforcement of the law, the committee proposes an ombudsman. The committee also proposes a grocery portal and better food labeling. In addition, the committee calls for the authorities to consider the need for a separate Franchise Act similar to the one in Sweden.

The committee has uncovered factors that it believes may be characterized as unreasonable business practices. Such factors may have consequences for consumers in the form of selection and prices, and are also significant for the development of the entire food value chain. Currently, these factors are not subject to regulation. The EU is working on corresponding studies of unreasonable business practices and different measures are being discussed. Countries such as France and England have already drawn up legislation. The Committee’s chairman, Einar Steensnæs, participates in the EU’s High Level Forum working on this subject.

” The committee’s study shows that retail no longer is merely retail, but also controls distribution, purchasing and, to an increasing degree, industrial and primary production. Retail thus emerges as a competitor toward its other suppliers. This power shift, which is also taking place internationally, emphasizes that it was important and far-sighted to appoint the Food Chain Committee,” says Minister of Agriculture and Food, Lars Peder Brekk.

The food chain owners disagree with the committee’s findings, and they point out that high farm subsidies and customs barriers contribute to higher food prices in Norway, in addition to Norway’s overall high cost levels.

Source: The Norway Post/Ministry of Agriculture and Food

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