– We see that the prices are mostly adjusted up, not down. We want to find out if there is something that opens the door for coordination and adaptation to higher prices, says competition director Tina Søreide. In Bergen, the Norwegian Competition Authority watched closely when Industry Minister Jan Christian Vestre announced several measures to curb food prices on Thursday. Since December, several media outlets have reported that the industry is predicting yet another violent rise in food prices in February, as prices also increased significantly in July last year. Although the industry has for years denied that the chains coordinate prices, Vestre is worried that the stores have created a routine so that the prices can safely be raised a lot during these months. – The fact that grocery prices increase on 1 February and 1 July in a fairly rigid market can contribute to Norwegian consumers paying more for food than they should have, says Vestre to news. SKEPTICAL OF THE FOOD INDUSTRY: Minister of Industry Jan Christian Vestre (Ap) wants an investigation into how the grocery industry manages to raise prices at the same time in January and February. Here with Minister of Agriculture Sandra Borch (Sp). Photo: Gorm Kallestad / NTB Bigger price jump than before Every year the biggest price jumps occur after 1 February and 1 July. In the food industry, these months are called price windows. Price increases are then taken out after negotiations with suppliers, the agricultural settlement and the wage settlement. The industry itself has developed this practice. The tendency for strong price jumps these months has become stronger over time, shows news’s mapping based on Statistics Norway figures: Law professor Erling Hjelmeng at the University of Oslo. Photo: Hallvard Norum / news In February and July, prices have risen by 1 per cent on average from the previous month in the period 2003 to 2012. But from 2013 to 2022, the price increase has been 2.7 per cent on average. In the price windows, the increase is almost three times greater than at the beginning of the 2000s, and the price fluctuations have become stronger. UiO professor Erling Hjelmeng believes this form of pricing can create a pattern that results in weak competition. – You have almost got a kind of institutionalized price signaling, he says to news. – Uheldig Hjelmeng is one of Norway’s foremost experts on competition law, and has himself been shocked that prices are set this way in the grocery industry. – When you know that these are price increases that come twice a year on this date, you at least have no incentive to take the least possible, when it comes to price increases, he says, and continues: – What is certain is that it is an unfortunate pattern for price formation in the industry, because the players, so to speak, don’t have to signal to each other to create the understanding that prices will go up on 1 February and 1 July, says Hjelmeng. Vestre has asked for a full review, which the competition director will initiate. But she does not want to state that the players have a common understanding that prices will go up a lot these months. – Before we can answer whether they do, we have to do some research on this, says Søreide. – We do not see this as a March order from the government, says competition director Tina Søreide about the government’s message that they must survey the industry further. She is happy that the politicians are concerned about food prices. Photo: Bjørn Olav Nordahl / news – It’s not illegal The law professor is excited about what the government and the Norwegian Competition Authority can do if they find that the practice is harmful. – It is not illegal, and is probably a bit of an Achilles’ heel for the entire Competition Act. Whether it is possible to shake up this price pattern in another way. I think you would get a lot of “credence” for coming up with a clever solution. – Then we’ll see how clever the Competition Authority and Vestre manage to be, says Hjelmeng.
ttn-69
Will investigate the tendency towards larger price jumps for food in July and February – news Norway – Overview of news from different parts of the country
