– It is deeply disappointing. I don’t understand that they can do that. Goes against all professional advice, says Kristine Aasheim, general manager of Q-meieriene AS. Today, there are several measures that help smaller dairies in the competition against Tine SA. This applies, for example, to Q-dairies, Synnøve Finden and Rørosmeieriet. In the Hurdalsplattformen, the government announced that it would phase out these measures, and this morning it became known that the government will make changes from 1 July 2024. – Now we are taking and making a change in the support that Q-dairies and Synnøve Finden, among others, receive, says Agriculture and Food Minister Geir Pollestad (Sp). The changes come despite warnings from, among others, the Norwegian Competition Authority and the Consumer Council. These are the changes: The distribution grant will be removed. The rate for differentiated taxes and subsidies will be increased from 27 øre to 30 øre per liter and a cap of a total of NOK 90 million will be introduced on the scheme. The special capital allowance will continue, but the extra incentive of five øre per liter will be removed. Less to the Q dairies Aasheim believes this has been a matter of principle for the government. – They have promised in the Hurdal platform, which they stand for, even though all professional advice, all studies, say the opposite. As general manager of the Q dairies, she cannot see that the minister has listened to them: – I can’t say that he has. Because he is taking away the distribution subsidy, and it is simply to be able to compete on milk. DISCONTINUED: The size of the price equalization scheme will be reduced from NOK 200 million a year. Among other things, the support will end if dairies are not allowed to distribute. Photo: Alexander Nordby / news At the Q dairy in Gausdal in Inlandet, they produce yoghurt, skir and sour cream products. They also have some production of milk. Production manager Geir Ole Stenslette at the Q dairy in Gausdal says they are proud to have been involved in innovation in the dairy sector. INNOVATIVE: Production manager Geir Ole Stenslette at the Q-dairy in Gausdal highlights sour cream with a screw cap as a product from Gausdal. Photo: Alexander Nordby / news End of subsidies for distribution The annual total payments over the scheme have been around NOK 200 million. With the changes, the amount is reduced to around NOK 150 million a year. – We believe this is sufficient to maintain good competition in the dairy market, while at the same time saving those who pay this fee this money, says Pollestad. The savings come, among other things, from the discontinuation of the so-called distribution subsidy. – It cannot be demonstrated that Q-dairies or Rørosmeiriet have higher costs for distribution from dairy to store than Tine has, says Pollestad in the press release. SATISFIED: Agriculture and Food Minister Geir Pollestad says he is very pleased to have settled the case. The government believes that the new scheme will facilitate “development, diversity and competition” in the market. Photo: Peder Bergholt / news Since the milk settlement in 2007, three competition-promoting measures in particular have been financed through the price equalization scheme for milk: A general subsidy which means that the competitors at the processing stage have received a reduction in the price of the milk product. A distribution subsidy for liquid product because competitors have higher costs in parts of the distribution business. A special capital allowance for dairies with their own suppliers. In today’s press release, the government specifies that the main part of the measures will be continued. SETTLEMENT AFTER YEARS OF CONFLICT: Competition-promoting measures in the dairy sector in their current form have existed since 2007. Photo: Terje Pedersen / NTB Trosser professional advice The competition-promoting measures have been evaluated every five years, and the latest report from the Directorate of Agriculture came in December last year. Even then, the Norwegian Competition Authority was clear that they believe the measures that are now being changed are necessary for the market and should be continued. Ideally, the measures should be strengthened, the inspectorate believed. And for the changes that have now been adopted, the Competition Authority has been resoundingly clear in its input: Pollestad, for his part, believes that the government has taken the input into account. – But, this is against what the Norwegian Competition Authority says. Don’t you listen to them? – There are two sides to it. Firstly, we listen to them, because we keep three quarters of the grant. The plan was basically to take everything away. So, we have listened to it, says Pollestad. He adds that there will be no more changes from the government now. Tine is still the largest player in the market. The cooperative has over 90 per cent of the volume in the raw material market and around 75 per cent of the use of the milk. The Norwegian Competition Authority does not wish to comment on today’s decision, but refers to the consultation response from October. This is the price equalization scheme: The price equalization scheme for milk was introduced in 1997, and regulates the price differentiation of milk as a raw material for different uses. It also gives milk producers the opportunity to reach a target price for milk, regardless of what the milk is used for and where the production is located. In price equalization schemes certain products, such as drinking milk, have a tax, while other milk products, such as cheese and dry milk, receive a subsidy. The scheme consists of: Equalization between the use of milk and by-product. Geographic equalization, which should give the opportunity for the same price regardless of where the production is. Competition-promoting measures such as special distribution subsidies, and differentiated fees and subsidies. The scheme is self-financing. This means that the fees paid to the scheme finance the grants. The following dairy companies are part of the scheme: Tine SA Synnøve Finden AS Q-Meieriene AS Rørosmeieriet AS Normilk AS Valdresmeieriet AS Arno Landman Mondelez procurement Europe – Norwegian branch Source: Directorate of Agriculture Much criticism The proposed change was put out for consultation this summer. The consultation deadline expired in October. There were 30 submissions in the hearing – and a majority of them were negative about the changes. The Consumer Council was one of them: But there are also positive voices in the debate. The Norwegian Farmers’ Association has supported most of the changes that have now been presented. – With today’s changes, the price equalization scheme for milk can be used more for what it is intended for: equal milk price to the farmer regardless of what the milk is used for, where in Norway it is produced and the largest possible market for Norwegian milk, says manager Bjørn Gimming. POSITIVE: – This is about how we can maintain and increase the market for Norwegian milk, and the price equalization scheme can now be used for what it is intended for, so that we can have agriculture all over the country, says leader of the Norwegian Farmers’ Association, Bjørn Gimming. Photo: Camilla Alexandra Lie / news Little time The changes will come into force on 12 July 2024. The government initially proposed that the new scheme should be implemented at New Year, but has taken into account that it will be difficult for the players in the market to implement.
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The government reduces support for the dairies – news Innlandet – Local news, TV and radio
