Kiwi owner Norgesgruppen has removed price hunters after they were fined a historic NOK 8.8 billion fine. Now I searched for new things.
Norgesgruppen recently announced a price catcher on Finn.no to monitor competitors’ prices.
The job announcement comes eight months after the Norwegian Competition Authority was notified of billions of dollars in fines to Norway’s three biggest grocers, Norgesgruppen, Rema 1000 and Coop, among others for illegal price cooperation through price-seeking business.
Unlawful collusion in prices
The background to the notification of the billions in fines is that the Norwegian Competition Authority believes that the grocer players have engaged in illegal price collusion by industry rule, which has given the regulated practice of price seekers in each other’s stores.
Discount chains Kiwi, Rema 1000 and Extra are constantly fighting a price war to win customers, and in these stores price hunters must regularly monitor each other’s prices.
The audit believes that price-seeking activity may have contributed to the breach of competition law, raising prices in Norwegian grocery stores.
The case has yet to be finalized through the review, and it remains to be seen whether the grocery operators will have to pay billions in fines.
In 2010, grocery operators signed an agreement, the so-called industry base. The standard necessitated an agreed and systematic monitoring of competitors’ prices through a price research scheme.
In December of last year, almost in a panic, Norgesgruppen was able to say that it has now done away with the industry scheme, and the way it has organized competitor monitoring, which means that they too Disqualify competing bounty hunters. Follow the competitors quickly.
Waiting for the result
The head of the department at the Norwegian Competition Authority, Magnus Gabrielsen, stated that the issue of illegal price collusion is still being addressed. Among other things, the audit is awaiting a response from grocery chains.
When asked about the Norwegian Competition Authority’s opinion on reintroducing bounty hunters, he replied:
– Norgesgruppen is well acquainted with the content of the notification of a violation of the ban on anti-competitive cooperation in connection with the price research work, and our assessment of the case. The Norwegian group must itself assess whether the use of bounty hunters would again constitute a violation of competition law.
He maintains that the Norwegian Competition Authority in its notification to grocery chains has described in detail the problematic aspects of the price research scheme.
Is Norgesgruppen breaking the law now?
– They know our assessments of the ongoing case, where we indicated, among other things, the agreement between the chains on access to the stores, and how the information was used. Price hunters per se are not off-limits, he says and emphasizes:
– Everything we said in December is on track.
He says they either make a decision in line with the warning or the ratings will change after the chains send in their responses. The Norwegian competition authority states that it has not set a deadline for the chains’ response.
Did Norgesgruppen interview you before announcing the situation?
– We will not comment on the type of dialogue we had with them until the case is over. Nor will the Norwegian Competition Authority give priority to following up on a vacancy announcement.
The discovery announcement states that tasks include obtaining prices in competitors’ stores and providing ongoing reports to NorgesGruppen’s head office in Oslo via text or phone.
In addition, technical equipment is delivered for reporting. A vehicle is required, as the employee should expect to be able to move quickly between different areas, it was reported.
Nettavisen’s sources have spoken of their belief that the dispute between the Norwegian competition authority and industry will be protracted. They envision several rounds in the legal system where the industry will claim its innocence.
According to several sources Nettavisen spoke to, it is concerning that Norgesgruppen controls 44 percent of the total grocery market.
Among other things, the Ministry of Trade and Industry has provided additional grants to the Norwegian Competition Authority to monitor the competitive situation.
Competition Authority blessing
Stein Rømmerud, Executive Vice President of Norgesgruppen, confirmed that the notification from the Norwegian Competition Authority relates to industry standards
The Executive Vice President notes that the agreement is the result of a dialogue between several players in the industry.
The Norwegian Competition Authority was among those who were most closely informed of this agreement. But that’s another thing than they concluded that bounty hunters are in and of themselves illegal, he says.
Stands by itself
As previously mentioned, panic arose in the grocery industry when the Norwegian Competition Authority announced billions in fines for what it believed to be illegal price collusion.
– Why were bounty hunters fired in December when a billion fine was announced?
We have finished the part of the Convention regulating this, the so-called industry standard for comparative advertising, says Romero, and asserts:
– We’ve said many times, even when this issue came up, that industry standards don’t violate competition law, he says.
Norgesgruppen believes price hunters guarantee low prices in the market, and that you can’t compete on price if you don’t keep tabs on competitors’ prices, he says.
– The Norwegian Competition Authority told Nettavisen that everything it said in December is up-to-date, what do you think of that in the wake of the job announcement?
We feel very confident that we are not violating competition law. We have visits from bounty hunters from our competitors, and we follow others as well. The executive vice president says the job posting where we’re looking for a bounty hunter is part of it.
Rømmerud will not agree that there is a basis for claiming that the price-seeking scheme is an illegal pricing collaboration.
– We do not understand the Norwegian Competition Authority’s notification of billions in fines, and we will not accept any decision that is said to have violated competition law.
– How far are you willing to take this in the judicial system?
– We’ll take this as much as needed. Nothing illegal happened here.
Norgesgruppen says it’s reasonable to assume that all players continued to monitor competitors’ prices, even after they said price seekers were fired in December last year.
Rømmerud will not answer how many bounty hunters currently work for Norgesgruppen.
“Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff.”