Consumer, food | Calling for a price freeze in Kiwi after the dividend ceremony: – unheard of

Consumer, food |  Calling for a price freeze in Kiwi after the dividend ceremony: – unheard of

(The newspaper online):- While food prices have risen for most people, things have gone very badly at the top of the value chain, with those who sell food, SV deputy leader Torgeir Knaj Vilkesnes tells Nettavisen.

– This shows once again that grocery chains prey on farmers and ordinary people, he said.

The deputy leader of SV wants to take radical steps to improve competition and thus lower prices.

“Now I'm tired of hearing grocery stores complain that competition is too fierce, costs are too high, and margins are too small,” Vilkesnes says.

High food prices and dividend distribution ceremony

For customers, 2023 was anything but a golden year. Then food prices rose by 10 percent. This was the strongest increase in 40 years.

But for the owner of Kiwi, Meny and other Norgesgruppen companies, the result has been really good.

Recently, Norgesgruppen was able to provide accounting figures for 2023, showing a solid profit of NOK 3.4 billion after tax.

Top CEO Runar Holevik has been rewarded with a record bonus. He received a salary and bonus of NOK 12.5 million, and in addition, NOK 4.5 million was allocated for pension.

In a year when food prices rose by 10 percent, Holevik's total pay including pension rose by 8.8 percent. The salary increase itself was 4.2 percent, according to Norgesgruppen, which is lower than that of other employees.

– It is not unheard of for the owners of Norgesgruppen to continue to enrich themselves with billions more in profits for the owners and big bonuses for management, all at the expense of customers, Rødt director Marie Sniff Martinussen tells Nettavisen.

In an email to Nettavisen, Norgesgruppen's communications director commented on the criticism as follows:

– Our king Low no matter what industry you compare it to. Operating at a loss will neither serve the farmer nor the consumer, writes communications director Stein Romrod.

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Previous investigations have shown that grocery chains' margins are much lower than most food suppliers.

– Norgesgruppen invests an amount greater than the annual result in stores, warehouses, logistics and sustainable solutions across the country, and employs more than 45,000 people. He wrote that Norway depends on private companies that make profits.

– Stopping the rise in prices for kiwis

Martinussen at Rødt believes that Norgesgruppen is making more than enough gains.

– Food prices rose by almost 10 percent in the past year, which means a significant decrease in the wallets of ordinary families. The group must stop all price increases in Kiwi, Mini and its other storesSays.

The anonymous Johansson family owns the majority of Norgesgruppen, about 75 percent. This means that most of the profits of NOK 875 million belong to them. Johan Johansson is one of Norway's richest people, taking over as chairman of Norgesgruppen from his father in 2022.

The Johansson family has a fortune of more than 50 billion Norwegian kroner. “It tells me that Norgesgruppen has too much power, and we see that power being used to make one of the richest families in Norway even richer,” says Martinussen.

– Ruled by a small number of families

– Grocery chains say they have small margins, but they make huge profits. This is a result of allowing too few families to control the grocery market, and largely just a few families, Vilkesnes says.

He points to Norgesgruppen, Rema 1000 and Bunnpris as family-owned companies as well. In the food giant Orkla too, a family dominates, namely Stein Erik Hagen and his children.

Many shelves in Norwegian grocery stores are stocked with Orkla products, from Grandiosa, Nogatti and Møller's cod liver oil to Omo Color, Toro soup and Nidar chocolate.

For Norwegian grocery customers, these goods are becoming increasingly expensive until 2023. But for Orkla, the financial results have been impressive. It has been decided that the dividend to the owners will be a staggering six billion Norwegian kroner.

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Hagen's subsidiary Canica owns 20 percent of Orkla's shares, and of the six billion, NOK 1.2 billion goes to the Hagen family. This is equivalent to the price of 40 million Grandiosa pizzas, or what 7,700 Norwegian families spend on food for an entire year.

CEO Nils Sylt was able to note the total salary and other remuneration amounting to NOK 25.4 million. This includes a bonus of NOK 7.2 million.

Orkla was given the opportunity, but did not wish to comment for this article.

-The food is overrated

Nettavisen recently wrote about how grocery chains have secured control of several parts of the value chain over the years.

– They also increasingly own the infrastructure, from suppliers to wholesalers, transportation and real estate, says Vilkesnes.

Today both Norgesgruppen and Reitan are major players in the real estate industry. For example, Reitan Eiendom earned NOK 1.5 billion in rental income in 2022. Norgesgruppen is the largest landlord in Scala Eiendom, which in turn owns 27 shopping centres.

– What's wrong with them being so big?

– They get richer at the expense of ordinary people. There are many indications that Norwegian grocery prices have been overpriced for a long time, and that these large profits have been financed by ordinary people through excessively high prices in supermarkets.

-We are full of advertisements with all the chains claiming their prices are low. My claim is that none of the big chains in Norway are low priced.

Rebuke the government

Vilkesnes believes it is necessary to take measures that are completely different from what the government has so far said it will do to improve competition.

-We should put a cap on the size of the grocery market segment a person or company can own. The Norgesgruppen began to grow to the point where it was able to set prices, and put pressure on suppliers if they wanted to.

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He also believes there should be an end to the strong control that chains exercise over wholesalers and producers.

“This vertical integration must be broken down,” says Vilkesnes.

Rødt leader Marie Snève Martinussen believes the government is doing too little.

– Where is the political courage for the government to do something about the power of food giants? In 2023, Kiwi is bigger than the year before, and it's time to do something about the massive concentration of power in the grocery industry, Roodt suggested.

We do not want socialist arrangements

The Right Party also believes that measures are necessary to improve competition in the grocery business, but they do not want regulations as called for by SV and Rødt.

– The right does not believe that the solution is to introduce socialist arrangements where we politicians dictate who is allowed to own what, and how much, through property restrictions, parliament representative, Lene Westgaard-Halle, tells Nettavisen.

She thinks it's not entirely surprising that some families can amass significant fortunes by selling groceries.

– She says that the reason grocery stores have built so much wealth is primarily because they operate in large volumes, meaning they have many stores.

At the same time, she realizes that the situation today is not good.

Competition in the grocery store value chain is clearly very bad in Norway, which is precisely why Parliament has joined forces to try to help promote this competition, she says.

The Business Minister had drawn up a ten-point plan to improve competition, but Westgard Halle did not like it.

She says, unfortunately, that the government is approaching paralysis in these areas.

Dalila Awolowo

Dalila Awolowo

"Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff."

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