– The reason why food prices have increased is compounded. You have what you can call the good reasons, but then you also have reasons that are not so obvious. That’s what Bent Sofus Tranøy says, who is professor of political science at Høgskolen i Innlandet and Høyskolen Kristiania. In December 2022, a source told news that the prices would increase by up to 10 percent from 1 February 2023. In the past, it was common for the store chains to increase prices on 1 February and 1 July, but the Competition Authority has been critical of this. Now, the latest Statistics Norway figures show that food prices have just increased by 10 per cent in 2023. This is the highest price increase in over 40 years. Pointing at the food giants The good reasons for the increase in food prices are those that come from the surrounding areas, says the professor. These are, for example, electricity and energy prices, weak exchange rates and interest rate increases. The reasons that are not as clear-cut come from what he calls the structure of the grocery market. – It is only about three pieces of this here. Norgesgruppen, Coop and Rema. They follow each other closely, he says. The three grocery chains have been under investigation since 2018 by the Norwegian Competition Authority. In 2020, the supervisory authority announced a fine of NOK 21 billion. They believe the chains have collaborated in a way that makes the food more expensive than it would otherwise have been. Fruit and vegetables are among the food items that will increase in price the most in 2023. Photo: Josef Benoni Ness Tveit / news Tranøy believes that the food giants see their average increase in food prices when inflation is high. – They use this as an opportunity, he says. The professor calls the competitive situation problematic, and believes that the food chains could do a lot to prevent price growth of 10 per cent. – They can do more, but they don’t want to. Their primary goal is their own profitability, he says. The daily grocery chains are at odds In 2022, Norgesgruppen had a profit before tax of 3.6 billion. The result for Rema 1000 before tax was 2.5 billion. Coop’s profit before tax was 576 million. Coop believes that Tranøy is wrong by claiming that they are using the situation to raise prices. – Coop has not increased prices more than we had to in order to compensate for increased prices from our suppliers, says Harald Kristiansen, who is director of communications at Coop. Rema 1000 also disagrees in Tranøy. – We have in no way increased our margins. Our margins have been between 3 and 4 per cent, ever since we established low prices in Norway back in 1979. This is far lower than in many other industries, says Line Aarnes, category and purchasing director at Rema 1000. Executive director for communications and public relations in Norgesgruppen Stein Rømmerud answers as follows: – The expert is wrong. He has no evidence for these claims. We had a profit margin of 2.9 per cent in the first half of the year, and we have never before experienced such a strong price increase from suppliers. Lower price increases in 2024 Food researcher Ivar Pettersen in Alo Analyse says the high food prices make it more necessary than before to look at alternatives to the goods we usually buy. Certain foodstuffs have increased by over 20 per cent in the past year. Frozen fish, sugar and fruit and vegetables are among the goods that have increased in price the most. – It is a bit easy to stare blindly at these very high price increases. Some seafood is fried by over 20 per cent, while other types of seafood are fried by 5-6 per cent, he says. The food researcher believes that the increase in the price of food will be much lower in 2024. He points, among other things, to the fact that international commodity prices have fallen sharply. – I expect that we will see a food price increase next year of half or less than half of what we have seen in the last 12 months, he says and adds: – But if we end up with a 4 per cent increase, it is still high in a historical context. We have to go down further before Noregs Bank, for example, is completely satisfied. Food researcher Ivar Pettersen in Alo Analysis believes that price growth will be lower in 2024. Photo: Magnus Skatvedt Iversen / news
ttn-69
Thinks the food giants could have slowed price growth: – They can, but they don’t want to
