October 1, 2022

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Grocery Exchange, grocery |  The rise in butter prices: - The fasting person must clarify this

Grocery Exchange, grocery | The rise in butter prices: – The fasting person must clarify this

We can excuse the peasants from the increase in the price of butter, but not the price of butter. On Tyne and grocers explain it. For Tyne, they have almost a monopoly on butter. They are a monopoly, Ivar Gasland, a social economist and associate professor at BI, tells Nettavisen.

In late January to early February, the price of Taine dairy butter rose about 18 percent.

The lower-priced Extra series was the first to raise the price. Two competitors, Kiwi and Rema 1000, soon after increased the price by 10 percent.

When Extra discovered that Kiwi and Rema 1000 wouldn’t settle for the same price, they priced the butter like the competitors.

The online newspaper has previously documented that individual goods are becoming more expensive by up to 70 percent.

The increase in butter prices was part of the increase announced in February. Suppliers have an agreement with grocery chains enabling them to increase prices on February 1 and July 1 each year.

Read also: Increase prices by up to 70 percent at the grocery store: Grocery expert warns

Norwegian milk is not affected by the rise in raw material prices

Norwegian milk is produced in Norway, and is not affected by economic fluctuations in the market for raw materials or shipping in the world.

Sindre Ånonsen, Tine’s director of communications, assures Nettavisen that buying butter is becoming more expensive for groceries.

– There has been a moderate increase in the price of butter from us, but it is the supermarket chains that set the price.

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Tine won’t answer questions about grocery chain brand size.

Gaasland says the higher price of butter cannot be explained by the fact that buying Tine milk from Norwegian farmers has become more expensive.

Tine can raise the price of butter without the farmer getting paid more, Gaasland told Nettavisen.

The price of Norwegian milk is regulated at the annual agricultural settlement in May. Thus, the price is now the same as it was in May last year.

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The increase in the price of butter cannot be explained

The social economist says it is important for Norwegian consumers to be informed that the increase in butter prices is due to Tine and grocers charging extra fees.

When one of the chains adjusts the price up, the others follow. They move in time. Somehow, an indication is given that others will raise the price as well, says Gaasland and asserts:

If it makes sense for Tine to raise the price of butter, it should raise the price of other dairy products, too.

Gaasland believes that the Norwegian grocery industry sometimes poises on a knife’s edge.

“It is not permissible to speak of prices together, but many implied signals can be conceivable, which are difficult to prove,” Gasland concludes.

Read also: Food price test: Extra is completely crushed by Kiwi and Rema 1000

The Norwegian Competition Authority is concerned

Sigurd Birkeland, a grocery venture at the Norwegian Competition Authority, is largely following Gaasland’s concerns. He says scrutiny has been concerned about prices in the Norwegian grocery industry for years.

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The Norwegian Competition Authority is concerned that the grocery industry is gradually raising prices, and that they are raising prices at the same time.

Birkeland mentions, among other things, addressing the ongoing investigation case, which addresses this among others, where the Norwegian competition authority announced a total fee of NOK 21 billion just over a year ago. He asserts that the case is not over yet.

Price changes in February and July often show that the grocery industry is raising prices more than suppliers are getting to know themselves. Birkeland says competition in the industry is weaker than we would like in the Norwegian competition authority.

He says there is a lot of interest about this in the media, and that some players in the market are reaching out and giving some clues about prices around the dates February 1 and July 1.

It’s important here that players keep their tongue straight in their mouth and stay within competition law, says Birkeland.

Misunderstood approach

– This would be a slightly misunderstood approach from Gaasland. We don’t want to be “acquitted,” as he calls it. Tine is the farmers’ private company, co-owned and operated by farmers and owner democracy, Ole Martin Buene, Tine’s director of communications, tells Nettavisen.

He says Tine’s mission is to be the farmer’s tool for bringing sales of milk to market.

We enter into negotiations with the chains to cover the increased costs and create value for our owners. Boweny thinks the price adjustments we’ve had in the negotiations are more moderate than what we’ve seen examples from the consumer.

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The price of milk raw materials is regulated by the Agrarian Agreement. Tine says they are interested in having a target price that means they have the competitive edge on all of their products, with or without strong tariff protection.

– This is why Tine’s score as an industrial player becomes so important to a farmer. Because we are successful in the market and able to achieve good financial results, this forms the basis for deferred payment to owners, he says, and adds:

In the financial situation that many of them are in now, this becomes even more important. We present results and forward payment for 2021 next Wednesday.