December 7, 2022

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Grocery, grocery |  A clear message to grocers: - Sharpen Yourselves

Grocery, grocery | A clear message to grocers: – Sharpen Yourselves

(electronic newspaper): At the fall meeting of grocers suppliers in Tonsberg, Tor Director Erik Ingbertsen of the Norwegian Food Safety Authority took the magazine out of his mouth. He simply asked the grocery players to work together.

– Hone yourselves! See the results on how to improve, Engebretsen tells Nettavisen.

The background of the statement is the results from Danish Food Safety Authority investigation On the negotiation climate between food suppliers and grocery chains.

Accusations of a culture of fear in the industry

“Culture of fear is a very powerful term, but that does not mean that there are no unpleasant things or that there is misconduct in the industry,” the director of the Norwegian Food Safety Authority, Tor Erik Ingbertsen, tells Nettavisen.

He notes that he has a strong definition of a culture of fear. Thus, he wouldn’t go so far as to call it a culture of fear, but he still believed the industry had a lot to clean up.

– Had the survey been conducted 15 years ago, it would have been worse than what this survey shows, he says.

It is the first time in the history of Norwegian grocers that the relationship between food suppliers and grocers has been examined. The investigation is the result of food suppliers who claim to have been harassed, blackmailed and sinister play from food chains for years.

Every fall, food suppliers like Tine, Nortura or Stabburet have to negotiate prices with grocery giants like Norgesgruppen (Kiwi, Meny, Spar, Joker), Coop (Extra, Coop Mega, Matkroken), and Rema. This is colloquially called a harvest hunt,

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In negotiations between suppliers and grocery chains, it’s all about price. Suppliers want the highest possible price to sell food at the grocery store, while grocery stores do their part to buy as many items as possible at the lowest price.

Negotiations in the so-called Autumn Hunt have been the subject of a number of allegations that suppliers are allowing themselves to put pressure on price for fear of not getting their goods into stores.

Negotiated contracts worth billions of dollars

In the survey on how legislation regarding good business practices is established in the industry, 241 food suppliers and 67 food chains responded to the survey.

Preliminary results from the survey, presented Thursday, show that much of the unculture in the industry hasn’t changed, Ingebritsen says.

When you look at the survey results, you realize that some people are worried, he says.

And it’s not the small change that is negotiated when food suppliers and grocery chains sit at the negotiating table. For many, it may involve contracts worth several billions.

So the Norwegian Food Safety Authority thinks it is alarming that nearly half of the suppliers negotiating with Rema 1000 and Coop say that not all information is provided when contracts are signed.

– What does he say about the negotiation climate in the industry?

– She says that there are doubts on both sides of the negotiating table. I think it was left from the previous culture of fear in the industry, even though there aren’t many of those players in the industry anymore. But he says a lot of the way you negotiate can be left behind. swamps.

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Despite the fact that billions may be at stake among gamers, a recent survey showed extensive use of verbal agreements.

– I am very surprised by its prevalence, but we do not yet know exactly what its background is. In the initial report, it was also noted that the benefits promised to suppliers are not always respected, he says.

It may be, for example, that a food supplier has secured a promise of promotion in negotiations that store chains do not respect.

Grocery stores promise a lot that makes relationships worse, says the Danish Grocery Inspectorate.

Reitan Retail: – We have to take it seriously

Rema 1000 is among the grocery chains that come up with the worst food suppliers. Kårstein Eidem Løvaas, communications officer at Reitan Retail, says Rema 1000 takes cash very seriously.

– He says to Netavizen, if the inspection says that you should tighten your grip, you should take it seriously.

How do you comment on allegations about the culture of fear?

We can go a long way to put the word culture of fear away, there may have been more before. Preliminary results from the survey show the industry is moving in the right direction, says Edem Lovas, and notes that they appreciate that grocery players can have an open dialogue with the Norwegian Grocery Authority.

So far, Reitan Retail will not comment on the results, which relate to the lack of all information on the negotiating table, and the widespread use of oral agreements in contracts that can be worth billions. But he believes the report could be the start of a better collaborative climate in the industry.

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It can contribute to a healthy competition

Mette Hannekammohog is the Director of Communications at the Danish Grocery Suppliers Association (DLF). DLF is an interest organization for independent brand suppliers in the grocery and restaurant market.

Surveying is an important basis in working on healthy competition in the grocery market. She said it would be interesting to follow the development over time, now that it is performed annually, and adds:

The questions address challenges in the grocery market. Engebretsen states that the industry has great potential for improvement in many areas. We’re glad the supervising director was so clear in his call to the grocer’s players, she tells Nettavisen.