For years, grocery stores sent bounty hunters into each other’s stores. They scanned the prices, and sent massive amounts of price information centrally to the food chains. In this way, the chains could follow each other’s pricing every day. Last week, the inspectorate emphasized that this gave less motivation to lower prices, because the competitor could immediately follow suit. The advantage of being the cheapest lasted only a few hours. But the inspectorate also said that the chains “talked together” about the pricing of selected products. In this way, the chains could tell each other that prices were to be increased, according to the inspection. – People in the chains responsible for setting prices have internally referred to price increases as sending signals, or responding to signals from competitors about requests for further price increases, says Magnus Friis Reitan, deputy head of the department for food in the Competition Authority. PROMISES MORE INFORMATION: Magnus Friis Reitan in the Norwegian Competition Authority says they will present more documents in the near future. Photo: The Norwegian Competition Authority, among other things, has access to large quantities of e-mails sent internally in the chains that can document that such signals were sent. – It was also referred to as “talking together”, stated Reitan at the press conference last week. It is illegal for competitors to collude in setting prices. Last week, the grocery giants were fined a total of NOK 4.9 billion for what the inspectorate believes to be illegal price collusion. All the chains say they have not broken the law and will appeal the decision. The case in summary The three major players in the grocery industry, Coop, Norgesgruppen and Rema, have been fined a total of NOK 4.9 billion for illegal price collusion. Competition director Tina Søreide says that this is a serious breach of the law. Kiwi owner Norgesgruppen and Reitan Retail, which owns Rema 1000, will appeal the decision to the Norwegian Competition Authority. The inspectorate demands that grocery stores must stop checking each other’s prices with so-called price hunters. Norgesgruppen has no plans to stop using price hunters. The three major players account for 95 percent of the Norwegian grocery market. The Norwegian Competition Authority has been investigating the consumer goods industry for almost 7 years. The summary is made by an AI service from OpenAi. The content is quality assured by news’s journalists before publication. – We have proof When the competitors raised the price, for example of a type of soap, it was mentioned in e-mails as a signal. It was interpreted as meaning that the competitor could imagine increasing the price of several goods, for example an entire category of soap. FOOD BILLIONAIRE: Chairman Johan Johannson and his family have become billionaires as owners of Norgesgruppen. The Norwegian group says they will continue with bounty hunters. Photo: NTB – We have evidence that the chains have used price increases on individual products to signal that they want to increase the price of more products. There are rapid information flows back and forth, with the help of the prize hunters, says Reitan of the Competition Authority. In the e-mails, the chains discuss, among other things, how they should respond to the competitor’s signals, according to the inspection. – When it is detected that prices have increased on a type of product, the chains can respond quickly if it is of interest to follow up, says Reitan. Experts skeptical news has spoken to several experts. They are skeptical of the fee, and are calling for more documentation from the inspectorate that illegal collaboration actually took place. – So far we have not seen any “smoking gun” in the material that has so far been presented to the public, says NHH professor Tor Wallin Andreassen. of a total of NOK 4.9 billion for illegal price collusion. Competition director Tina Søreide says that this is a serious breach of the law. Kiwi owner Norgesgruppen and Reitan Retail, which owns Rema 1000, will appeal the decision to the Norwegian Competition Authority. The inspectorate demands that grocery stores must stop checking each other’s prices with so-called price hunters. Norgesgruppen has no plans to stop using price hunters. The three major players account for 95 percent of the Norwegian grocery market. The Norwegian Competition Authority has been investigating the consumer goods industry for almost 7 years. The summary is made by an AI service from OpenAi. The content is quality assured by news’s journalists before publication. – What the Norwegian Competition Authority has put forward in terms of documentation on effects appears a bit thin, says UiO professor of competition law, Erling Hjelmeng. In the past, he has had assignments for Norgesgruppen, but has no paid jobs now for the Kiwi owner. – TYNT: Law professor Erling Hjelmeng at UiO says he has not seen real documentation of price collusion. Photo: Hallvard Norum / news So far, only the food chains have received the report of over 500 pages. The inspectorate is clear that there has been real price cooperation. – We will publish a public version of the decision as soon as that version is ready, says Reitan. So far, the authority has only shown some extracts from e-mails where price increases are discussed. – The decision must first be reviewed to remove trade secrets, explains Reitan. Asking the grocery stores to stop using price hunters Because the authority believes that the collection of prices in the food chains has slowed down competition, they demand that the chains stop using price hunters to the extent that there has been. But Hjelmeng believes the inspectorate cannot force the chains to stop. – There is no authority to ban the bounty hunters. Although the supervisory authority has said that the scheme should end, they cannot intervene if the grocery chains continue as before, says Hjelmeng. But the supervisory authority completely disagrees with Hjelmeng’s interpretation. – We absolutely have the opportunity to order them to remove the scheme, says Reitan of the Competition Authority. He refers to Section 12 of the Competition Act. The paragraph indicates that the supervisory authority can issue orders that a scheme must cease, if the scheme harms competition. – The algorithms decide Even if the price hunters were to disappear, the experts believe that it is difficult to stop the rapid exchange of price information between the competitors. – Today’s technology with digital pricing and access to data about our shopping patterns is run through algorithms. This means that the chains will follow each other closely and follow the competitors when they find it opportune, says Andreassen. PROFESSOR: Tor Wallin Andreassen, head of department at NHH, says it is complicated to document actual price cooperation. Photo: Lars Tore Endresen / news Published 28.08.2024, at 08.47
ttn-69
This is how the food chains used the prices to “talk together” – news Norway – Overview of news from different parts of the country
