The government is proposing a new set of regulations for measures to promote competition in the dairy sector. The measures help smaller dairies to compete with Tine, which is by far the country’s largest dairy producer with 74 per cent of the milk market share. In the Hurdal platform, the Government announced that it would phase out these measures. – The price equalization scheme for milk is important for us to have active agriculture throughout the country. In the Hurdalsplattformen, we say that we will preserve the scheme, but gradually phase out the competition-promoting measures from the scheme. That’s what Minister of Agriculture and Food Sandra Borch (Sp) says. This is the price equalization scheme for milk 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 the target price for milk, regardless of what the milk is used for and where the production is located. In price equalization schemes, certain products, for example 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 equalisation, which should give the possibility of equal prices regardless of where the production is. Pro-competitive measures such as a special distribution subsidy, and differentiated fees and subsidies. The scheme is self-financing. This means that the fees paid to the scheme finance the subsidy. The following dairy companies are part of the scheme: Tine SA Synnøve Finden AS Q-Meieriene AS Rørosmeieriet AS Normilk AS Valdresmeiriet AS Arno Landman Mondelez procurement Europe – Norwegian branch Source: Directorate of Agriculture Challenges with financing The reason changes are now being made are challenges related to financing arrangement. This is the government’s proposal: Increase the rate for differentiated taxes and subsidies from 27 øre to 30 øre per litre. A total ceiling of NOK 90 million is being introduced for this scheme. Remove the distribution subsidy. In connection with the agricultural settlement, the state will make proposals aimed at organic milk. Continue the special capital allowance, but remove the extra incentive of five øre per litre. – The proposals balance well the considerations of competition and having milk production throughout Norway, she says. The government will submit the proposal for consultation with ordinary consultation processes. The aim is for the changes to come into force on 1 January 2024. – A disappointing day – This is a disappointing day for everyone concerned about lower prices on groceries. What the government is now doing in practice is to strangle Tine’s competitors. That’s according to Høyre’s business policy spokesperson, Lene Westgaard-Halle. Lene Westgaard-Halle is spokesperson for business policy in the Conservative Party. Photo: William Jobling / news – It does not seem that the government realizes that their proposal could mean the hook in the door for the Røros dairies, Synnøve Finden and the Q dairies, she says. Bjørn Gimming is leader of the Norwegian Farmers’ Association. He is satisfied with the proposal the government has now put forward. – There is no professional basis for continuing to pay out a special subsidy for distribution and we are of course very happy with that, that the government is proposing to remove it, he says. – We cannot continue to burden such an important scheme, as the Price Equalization Act, when there is no basis for it. Bjørn Gimming is leader of the Norwegian Farmers’ Association. Photo: Håkon Mosvold Larsen / NTB – Still weak competition Until 1995, Tine dairies had a state monopoly on all milk in Norway. For 20 years, smaller dairies such as Q-dairies, Synnøve Finden and Rørosmeiriet have received support to be able to compete with them. Despite this, the Norwegian Competition Authority believes that competition in the dairy sector is still weak and should be strengthened. Earlier this year, they presented a report which states that there are grounds for maintaining competition-promoting measures. Beate Berrefjord is department director for food, trade and health at the Norwegian Competition Authority. Before the proposal for new regulations was made clear, she told news that it is a bad idea to scale back the price adjustment scheme for Tine’s competitors. – What did you conclude from the report? – We cannot see that there is any reason to discontinue these competition-promoting measures. In any case, not without other measures being put in place that are either as good or better, said Berrefjord. – Our answer is, do not wind up these measures now.
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The government removes the distribution subsidy for smaller dairies – news Trøndelag
