– We contact municipalities when we see that they have regulations that can be harmful to competition, says competition director Tina Søreide in Bergen. In the last two years, the Norwegian Competition Authority has sent remarks to three Norwegian municipalities. The Authority encourages them to remove regulations that prevent competition. news has previously told how access to attractive retail premises is one of the most important entry barriers in the grocery market. Must document that the customer base does not overlap Tønsberg municipality in Vestfold and Telemark has received a letter from the audit. The municipal plan there has a requirement for food chains that want to open a new store: “It must be documented that the establishment will not have a customer base that significantly overlaps with similar business in the local area, nearest local / local center or in the city center” Competition director Tina Søreide follows what the grocery industry is doing and has tightened its grip lately. Photo: Bjørn Olav Nordahl / news In the letter from the Norwegian Competition Authority in February this year, they point out that the opportunity to compete for the same customers is an important prerequisite for achieving effective competition and value creation. The letter from the Norwegian Competition Authority In the letter to Tønsberg Municipality, the Norwegian Competition Authority writes the following: «As explained above, local competition is in itself important, and local competition also affects national competition between grocery chains. Furthermore, as mentioned, the barriers to entry in the grocery market are high for various reasons. In the Authority’s opinion, it is therefore of particular importance that municipal planning regulations do not place further restrictions on the possibility of establishing competing activities. In the Authority’s view, free establishment and well-functioning competition in the market will promote consumers’ interests. By removing barriers to establishment, so that new players can establish themselves in the competition with the established players, Tønsberg municipality will be able to contribute to socio-economic value creation in the form of lower prices and better offers of goods and services to its inhabitants. ” In Tønsberg, they explain that the reason for the wording is because this does not apply to downtown areas, but areas where they are basically not open for trade. – It is site development considerations that lie behind it. And exactly that wording is a guideline that addresses which considerations are relevant when we consider whether it is common to establish businesses outside downtown areas where all actors are welcome, says town and municipal planner in Tønsberg municipality, Magnus Campbell. Skien and Stavanger have also received similar letters. news knows of several Norwegian municipalities with similar practices. The wording of the various municipal plans varies, but often prevents grocery stores from establishing themselves in the vicinity of existing grocery stores. – We see that they may have provisions under the regulation in the Planning and Building Act which in practice have the effect that it prevents new establishment in the market, Tina Søreide explains. Gets many tips The Norwegian Competition Authority wants municipalities to do their part to improve competition in the grocery market for the benefit of their citizens, but believes that it is not always the case that municipalities are aware enough that such regulations actually hamper competition. In Tønsberg municipality, they admit that there is probably an established opinion that competition considerations in themselves should not usually be emphasized in spatial planning. This is exactly what the municipality also emphasizes in its response to the audit. But the municipality is now in the process of reviewing the municipal plan and is considering changing the wording: – Yes, we are working on the new municipal plan these days and it will be ready during 2022, says the city and municipal planner in Tønsberg. They are also considering changing the wording: – Based on the inquiry from the Norwegian Competition Authority, we will make an assessment of whether the wording in the current plan will continue to work or whether we can incorporate competition considerations in the plan together with all the other considerations we take in spatial planning. he says. The Norwegian Competition Authority has also received, and is receiving, more and more tips about other municipalities that may have similar regulations. Several municipalities do the same Bærum municipality is one of the municipalities where news has registered operates with similar rules. In the area part of the municipal plan, we can read the following: § 15.2 Retail for groceries with up to 800 m² GOOD sales area can be established in areas for residential development, where the area does not have a grocery offer. ” In Bærum, grocery services have already been established in most areas with residential buildings, which makes it difficult for others to establish themselves. Norgesgruppen has a market share of 67.7% here according to the Forecast Center. Bærum municipality has been presented with the Norwegian Competition Authority’s views on this type of regulation. Arthur Wøhni, municipal director of society in Bærum municipality, writes the following in an email to news. – The municipal plan’s rules on being able to establish grocery stores in areas regulated for residential purposes are not a limitation, but an opening for smaller grocery stores to be established in areas regulated for residential areas, Wøhni writes. The municipality says that the reason for this is to facilitate short-distance shopping, and that more people can go to the store. – The rule allows for a simplified proesee to establish a smaller grocery store. The municipality does not take a position on store-chain affiliation, Wøhni writes, and adds: – Larger stores / shopping centers can only be established where this is regulated in accordance with the Rules of the Planning and Building Act and usually after prior zoning plan processing. Professor looks at Sweden On Friday, Minister of Trade and Industry Jan Christian Vestre (Labor Party) announced that the government will advocate banning so-called negative easements, which means that food chains block competitors from opening shops in certain premises. Professor Frode Steen at NHH is an expert in competitive economics. He believes the government should also look at what the municipalities can do to get better competition locally. NHH Professor Frode Steen. Photo: Hallvard Lyssand / Hallvard Lyssand – Prohibition of negative easements is wise, but it is at least as important that municipalities can take competition into account when regulating new premises and business areas, he tells news. He refers to Sweden, where the authorities have the opportunity to do just that. – In our neighboring countries, rules on competition have been introduced when applying to use an area for shops. Then competition considerations, ie that other chains are present, is a condition. That is not the case in Norway. Hello! Do you have any input or tips on this matter that we should know about? Feel free to send us an e-mail!
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Municipalities prevent competition in the grocery sector – news Norway – Overview of news from different parts of the country
