November 26, 2021

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Grocery exchange, alcohol | Beer prices: – Norwegian consumers are skinned by the grocery industry

Beer sales are raging against the grocery industry’s pricing of beer.

– Norwegian consumers are distorted – and the margins go straight into the pockets of major grocers. This is what Gulating Gruppen AS CEO Rolf Ivar Skar told Nettavisen.

Gulating Gruppen has 23 stores across Norway, selling from 400 to 600 different beers. In addition, they sell different types of soft drinks and kombucha. Skår says Gulating sells beer for 120,000 million a year.

He was not generous in his judgment of his competitors in the grocery industry.

Big grocery chains, Norgesgruppen in particular, have high margins on beer — and consumers are the losers, says Gulating Gruppen AS CEO Rolf Ivar Skår.

Last year, Norgesgruppen’s historic turnover reached NOK 100 billion. The grocery giant owns 44 percent of the total Norwegian grocery sector, including chains such as Kiwi, Meny and Joker.

Up to 11 kroner extra price per can of beer

A comparison of online newspaper prices of some brands of beer in Gulating compared to prices in Kiwi, Oda, Rema and Meny shows price differences of up to 11 kroner per pint of beer.

A pint of Budweiser is eleven kroner cheaper in Gulling than a mini. Rema 1000 charges an extra eight kroner for the same can of Budweiser beer.

A 0.33 liter bottle with Belgian beer Stella is ten kronor cheaper in Gulating compared to Meny.

The same bottle and beer can be 14 to 38 percent more expensive when purchased at the grocery store.

– Every time you buy a 6-pack of Budweiser in a Mini, you put 66 kroner directly into the pocket of the owners of Norgesgruppen – the company that in the 2020 crisis made an annual profit of 3.8 billion kroner, and paid 936 million kronor in profits, says Skar.

For the record, the largest owner of the Norway group is apparently Johan Johansson, who is the fourth richest in Norway, with a fortune of NOK 50 billion.

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Scar believes the lack of competition in the grocery industry is the problem.

– It would have been different if there had been a real competitive situation in the Norwegian grocery industry – it wouldn’t have been the case, said Skar.

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good deals

Do you make money selling Budweiser in Norway?

Yes, we do it at the wholesale level or in stores. We do not sell at a loss. Scar says we are selling at a usable profit.

– We want to show that not everything has to be as expensive as Norwegian consumers used to believe, and that it is not necessary to travel across borders to save money, for example, beer, as stated CEO of Gulating Gruppen AS.

The online newspaper Norgesgruppen asked why foreign beers such as Budweiser and Corona are more expensive in their stores than Norwegian beers?

– Foreign beer is much more expensive to us than Norwegian beer, and that explains a lot of the price difference. Norgesgruppen’s director of communications, Kine Søyland, says that when it comes to specific prices for various products, they are set by the chains themselves.

Also read: Recent report: Extreme differences in grocery prices in the North

The competitive situation is crucial

Norgesgruppen and Meny’s claim was submitted to Skår in Gulating. The online newspaper asked them, among other things, to comment on suggestions that Norgesgruppen makes disproportionately large profits from imported beer.

Among other things, we asked questions about why they charge more than 40 percent for the same beer, and how does this relate to the fact that Norgesgruppen is well known to have much better buying conditions than its competitors?

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The online paper also asked them to comment on Gulating saying that they make good money on similar beer products, despite the fact that they charge both 10 and 11 kroner less than Meny.

Neither Norggrubben nor Minnie answer questions directly.

– Prices are determined by the individual chain based on the competitive situation. Some goods are sold at a loss, while others are sold at better profit margins, says Director of Communications, Kine Søyland at Norgesgruppen to Nettavisen.

Søyland says NorgesGruppen had a profit margin of 3.8 per cent in 2020.

– That’s low, regardless of whether you compare with other industries in Norway, or with similar companies in our neighboring countries, you say.

In comparison, for example, Telenor has a profit margin of more than 20 percent.

Meny’s director of communications, Nina Horn Hein, told Nettavisen they couldn’t go into detail about the pricing strategy for individual products.

But in general, it would be wrong to compare Gling, a pure beer store, to Mini, a supermarket with large buildings, 10,000 items, fresh produce, its own bakery, professional expertise and many employees, she says and adds:

– For the mentioned beer products, which are just two individual examples of the narrow product lines of several hundred varieties of beer in Mini, we are on the same price level as other supermarkets.

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Norwegian consumers are drawn to Sweden

Jarle Hammerstad, acting chief grocer at Virke, cannot comment on the beer margins, but says:

We know that margins in the Norwegian grocery business are generally low. Previous margin surveys have shown that the biggest price increases come from the industrial level, not the grocery level, he says.

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He stresses that there has been very low growth in food and drink prices since last summer, and points out that the tax cut on mineral water from July of this year is one of the reasons.

Low price growth testifies to strong competition in the grocery business, Hammerstad says.

When the state budget was presented for this year, it became clear that taxes on alcohol will increase by about 1.3 percent, which means that you will have to pay approximately. 27 NOK for a liter of beer, and 55 NOK for a bottle of wine.

The tax on a liter of beer in Sweden is just over Kronen, well below one-twentieth of the Norwegian standard, while the tax on a bottle of wine is just under 20 Kroner. fees in sweden It must remain unchanged from next year.

Virk believes that there are still very large tax differences between Norway and Sweden, for example on beer.

– Helps to attract Norwegian consumers to Sweden and helps increase cross-border trade. Both trade and industry know very well the effects of cross-border trade, and they do what they can to maintain their turnover in Norway. Cross-border trade is a huge challenge for both the grocery business and industry, which must struggle hard to keep prices low and prevent trade leakage from growing. He says the annual cross-border trade of NOK 16-17 billion leads to a significant loss of value creation and jobs in Norway.

Do you understand this situation to me?

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