– Not Conspiracy – E24

– Not Conspiracy – E24

Are price increases for food products dominated by chains' own brands a plus? The Grocery Suppliers Association expressed concern. According to a Sifo analyst, there is reason to ask questions.

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– Varieties with higher EMV share have higher price appreciation than the market.

That's what Helge Hasselgaard, president of the Association of Grocers (DLF), said at a pre-Christmas grocery seminar.

EMV stands for Own Brands and is used as a name for store-owned products. Examples are First Price, Coop Series and R Series. DLF believes that more EMV will lead to independent suppliers being pushed off store shelves.

But is it true that segments with higher EMV go hand in hand with higher price growth?

– No statistical analysis of it. The only answers we have are anecdotal examples, says Sifo researcher Alexander Schjoll.

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Meat, bread and canned fruit

Let's see examples. First, we need to find out which types of foods have the highest and lowest EMV.

While submitting three different EMV reports to the government last year, the socio-economic analysis went through large, important food product groups.

  • in the middle meat products Minced meat has a high EMV share, but sausage and cured meats have a low share.
  • in the middle Baked goods Fresh bread has a high EMV share, but frozen pizzas have a low share.
  • in the middle Fruit/vegetables/berries There is a high EMV share within canned fruits and frozen vegetables, but a low share within jams.
  • IN Milk market There is usually a small EMV.
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Big differences in price growth

What has been the price trend for these different categories in recent years?

Since January 2019, food has increased by 26 percent, according to Norway's consumer price index.

  • Subsection Beef and Veal Parcel Post rose 38 percent Salami, cured ham and sausage 19 percent increase.

Socioeconomic analysis points out in its report that there are examples of categories with low EMV share and low price growth, as well as examples of categories with high EMV share and high price growth.

The trend continues:

  • In the same period, the price of fresh bread rose 26 percent, while the price of frozen pizza rose only 11 percent (19 percent before the price war in November).
  • Canned fruits and frozen vegetables have increased in price by 75 and 39 percent respectively. Jam, prices have gone up by only 24 percent.

– We are concerned

These are examples that show that in important groups of food products, EMV has increased prices the most, says Mette Hanekamhaug, communications manager at DLF.

The association fears that its members' products will be replaced by grocery chains' own brands. That would weaken competition and lead to higher prices, Hanekamhaug believes.

Doubt: DLF fears EMV is pushing its members off store shelves.  Here are Managing Director Helge Hasselgaard and Communications Manager Mette Hanekumhag.

– We are concerned that this applies to many product groups. If so, there is a risk that prices will rise further as EMV now grows at the expense of independent brands.

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So it is very positive that Industry Minister Jan Christian Westray (AP) will monitor EMV development going forward, he adds.

– Then the chain can raise prices

E24 emphasizes that examples of price growth in this regard are based on socio-economic analysis and are anecdotal.

– This is something that needs to be dug deeper, says Sipho researcher Schjol.

Sipho researcher Alexander Schjoll.

– Is it a conspiracy to say that EMV goes hand in hand with higher prices?

– We can imagine the following theoretical scenario: A retail chain underprices its own brands, which leads independent brands to compete and disappear. Then the chain may raise the price again. This is a perfectly plausible way to think about EMV. So no, it's not a conspiracy. The question is whether this is the case in Norway.

Shjol would have liked an answer to that.

– It would be best if the Norwegian Competition Authority were assigned this task, so that they could look at the issue properly with the law in hand. I think.

Grocer Eric Fagerlid says EMV has already been diligently researched, albeit in other countries.

– He says there are no clear answers to whether higher EMV leads to a poorer product choice or higher prices.

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– Unfortunate for discussion

This is also indicated by the socio-economic analysis, says Bendik Solam Vist, manager of Virke Dalkarvare. Norgesgruppen and Coop are members among others.

He emphasizes that the main conclusion of the report is that EMV has had positive effects on competition and consumer preferences in the Norwegian grocery market.

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Bendik Sollum Wist, president of Virke Groceries.

– DLF and large industrial manufacturers have long requested a survey on EMV in Norway. When it finally comes, they resist its conclusions and instead try to make recommendations that the report does not support. This is unfortunate for the debate.

There's no basis to say that higher EMV will lead to higher prices, Whist insists. He refers to his own formulation of socioeconomic analysis:

“It is not clear whether the distribution of brand types affects price growth over time. Many other factors can also affect price growth, and we did not go into that further in this survey.”

Joshi Akinjide

Joshi Akinjide

"Music geek. Coffee lover. Devoted food scholar. Web buff. Passionate internet guru."

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