Despite professional advice and warnings, the government is tightening the financial support that is supposed to ensure competition between Norwegian dairies. It is a watered-down SP victory that is now unfolding after months of internal tug-of-war between the two governing parties. Ap has received approval for some of the financial support to survive for so long. 70 per cent of the support amount will be continued, but the removal of the distribution subsidy will hit the Q dairies particularly hard. There are also those who can easily answer charges. More on that later. The technical support schemes raise debates that are much more general: Does this change the ambition for agriculture throughout the country and the prerequisites for district settlement? Is an industry destroyed with few players and the possibility of real competition? Will there be poorer and/or more expensive offers on the shop shelves? Or just more expensive? This concerns you either at your table or where you live. Or both. You probably didn’t think about it, if you even opened the white cap and poured a few deciliters of milk into a glass this morning: 27 cents of what you paid for the milk carton went in a kind of fee to a big money pot to equalize the price on milk in this country. The total amounts to close to a billion kroner, meaning that the milk price will be the same, whether the milk is bottled and transported a short distance in Rogaland, far in northern Norway. Either the milk goes straight into a carton, or it is further processed into cheese or yoghurt. Subsidies for shipping milk are cut. This will particularly affect the Q dairies. Photo: Torje Bjellaas / news Of this large billion-dollar pot, NOK 200 million is set aside to promote competition in the dairy sector. This is money that Q-dairies, Synnøve Finden, Rørosdairies and a few smaller players get at the expense of big Tine. In the Hurdal platform, the government promised to preserve this large pool of money, but will “gradually phase out” the scheme, which will specifically contribute to more competition in the dairy sector. For smaller things, the government chooses to continue special schemes that will ensure better margins for challenger producers. The government accepts that cheese and yoghurt in particular would have been replaced by imported products. The Center Party would not have been able to live with that. The capital allowance to the dairy farmers who do not deliver to Tine will also be continued. Sandra Borch on a farm visit. She proposes to cut 30 percent of an important measure for competition in the dairy sector. Photo: Javad Parsa / NTB The major move for which the government will garner the most criticism is the removal of the distribution subsidy. The subsidy has been based on the fact that the Q dairies do not have the same distribution as Tine from the dairy to the store. Tine transports all milk and products herself. Both from farmer to dairy and from dairy to store. The Q dairies must cooperate with others on shipping from the dairy to the store. Q believes that this is a significant structural disadvantage and not a competition on equal terms with Tine. In total, the Q dairies lose NOK 50 million annually as a result of Sandra Borch’s actions. Tine believes that the distribution is not a barrier for the competitors as it has been. The political fight The dairy fight is about something bigger, because long lines in Norwegian agricultural and district policy can be said to lie in the pot. It is important far beyond the “congregation” because it is about 15 percent of the shopping basket of an ordinary consumer. In important parts of the country, it is about measurable, concrete jobs. Politically, this is controversial because the Center Party can be said to support those interests that will not weaken Tine dairies, while the Labor Party as a reform-friendly, governing party is under pressure to act more business-friendly. Both Ap and Sp want competition in the dairy sector, but they do not necessarily agree on what is enough and the right type of competition and thus neither the means. Tine’s plant in Sandnessjøen. In the northernmost part of the country, Tine is still a monopolist for all practical purposes. Photo: Marius Guttormsen / news Today, Tine is two things: Tine has a major social responsibility for receiving milk from Norwegian farms and transporting it to dairies. This is more than a logistics operation. The duty to receive is a politically motivated infrastructure measure that ensures that it is possible to run milk production, or have a farm, or live and live, throughout the country. Tine is also a brand that guarantees you Milk in cartons, chocolate milk, Good Morning Yogurt and Norvegiaost. In direct competition with Q Meieriene and Synnøve Finden, who also have their milk cartons, yogurt cups and cheese packages a few shelves away in your store. On the one hand, Tine’s competitors believe that the competition-promoting measures must be strengthened rather than removed. Tine is still a dominant player. Q The dairies and Synnøve Finden can and will show that large investments in dairying on Jæren and cheese making inland have been made with a view to ensuring that the conditions for small producers do not deteriorate. In the worst case, jobs can disappear or be flagged out. It could also mean that there will be fewer products on the shelves and less product development in the future. Removing these measures could result in more expensive dairy products and poorer offers. On the other hand, Tine, the Norwegian Farmers’ Association and thus of course the Center Party believe that the competition-promoting measures contribute to creating a situation where Tine’s competitors can skim the cream of the dairy sector. The small ones can focus on localization and distribution to areas where things are well suited for efficient operation, such as Jæren. While Tine has to take sole responsibility for the whole of Northern Norway. Then Tine gets big expenses and little income. This could force a faster and more brutal reorganization of Tine into fewer and larger dairy plants, perhaps worse distribution. You don’t have to be a centrist to call it centralisation. Tine will have to cut whatever the government does, but an agriculture minister from the Center Party will obviously not start this snowball. Keeping these measures could mean greater pressure on Norwegian dairy farms and a weakened Tine. What are the Q dairies doing now? As a consumer, the most important thing is: What are the Q dairies doing now? If the loss is big enough, they can make good on their threat to change the entire operating model and make “First Price milk”. In other words, become a separate brand for one chain. Then the entire competitive situation in the stores changes. One chain will then be able to give the Q dairies the best position in the milk cabinet. Tine can in practice be squeezed out of many Norwegian stores. Then Tine and the Norwegian farmer and Norwegian agriculture are weakened. It is this battle that is the big, important one. And it has only just begun.
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The fight for the money, the land and the milk – Speech
