This is what TV 2 asked the grocery chains about – they refuse to be interviewed

On Wednesday 1 February, the trip to the grocery store can be significantly more expensive.

It is now the last step in the negotiations between the suppliers and the grocery chains regarding the pricing of food products.

Both the chains themselves, and experts, have warned people about more expensive food.

Increased drastically

During last year, the prices of food and drink increased by 6.5 per cent. This is more than the general inflation in Norway.

In connection with the announced price increase, TV 2 asked readers what they would like answers from the grocery chains.

We selected a number of questions and asked three of the biggest players to be interviewed, in order to give people answers.

But neither NorgesGruppen, Rema 1000 nor Coop were willing to meet us, despite being given the questions in advance.

They justify the silence with the Competition Act.

– There is a game going on between the grocery chains and the government now, which makes it difficult for them to speak out. They are severely limited by the Competition Act, says Ivar Fredrik Pettersen, Senior Advisor in Alo analysis.

Previously, Pettersen worked at Nibio, a research institute which, among other things, analyzes food prices.

– Afraid of saying something wrong

He explains that if a supplier signals that prices are becoming more expensive, perhaps other large suppliers will think that they can raise their prices.

This means that statements from both the chains and the manufacturers can potentially lead to prices becoming even higher, and that competition is weakened.

– They are probably afraid of saying something wrong. Both because the chains are now monitored extra by the Norwegian Competition Authority, but also because it is easy to reveal how much power they really have.

According to Pettersen, it is historically the manufacturers and increased import costs that have been responsible for the price increase of groceries in Norway. The wholesalers have accounted for a moderate part of the price increase.

– There is no doubt that it is very profitable for these chains to run a shop, but I do not think that there is anyone who is taking a return out of proportion as a result of today’s price increase.

However, Pettersen believes that the store is going to be a little tough when they set the prices on 1 February.

– The general costs, including gas prices, are lower now than in 2022. Some will probably use the argument that they have to cover last year’s power costs, but that is not an argument, I believe.

– Doesn’t work anymore

Coop is the only grocery chain that chose to answer some of TV 2’s questions by email.

In the email, the chain denies that they are making more money from the price increase and justifies the price jump by saying that the industry is still in a state of emergency.

When asked who is left with the profit from increased retail prices, and how much it is, Harald Kristiansen, communications manager at Coop, replies that food prices in Norway have increased less than in the EU and our closest neighbours.

– We do not think any link in the value chain makes more money in this situation. It is also important to bear in mind that the price development of groceries over recent years has risen far less than the general price increase.

Kristiansen says that we are still in a state of emergency, where global inflation and uncertainty about raw material access provide unpredictable framework conditions.

– Price increases for electricity, transport, raw materials and other things affect the entire value chain, both manufacturers, suppliers and grocery chains.

– Do not increase more than necessary

When asked which manufacturers have the most cost increases, Kristiansen replies that they cannot go into this for reasons of competition. They also do not want to comment on what kind of food products have the biggest price increase.

– What we can promise is that Coop, which is owned by the customers, will not increase prices more than necessary.

– In which sections do prices rise the most?

– We do not have a full overview of that. The value chain is long for many of the products, the situation is, as I said, very unclear due to the pandemic and the war and this will vary according to the raw materials.

– What is their response to the fact that food prices hit those with the least the most?

– There are many who are now experiencing increased living costs, and we fully understand that they experience the situation as demanding. At the same time, I think the vast majority of people see that we are still in a state of emergency, where global inflation and uncertainty about access to raw materials create unpredictable framework conditions.

According to the communications manager, Coop is not making more money as a result of increased food prices.

– On the contrary. Coop shares the profit with our two million customers, who are the ones who own us. We also have dramatically increased costs and significantly lower margins than our competitors and the major suppliers.

Kristiansen writes in the email to TV 2 that they are doing what they can to keep as much as possible on the prices.

– We see a clear trend where customers increasingly buy our cheapest goods and they make greater use of our offers, campaigns and membership coupons and discounts.

However, there are no restrictions on how much markup the chains can place on a food product from the producer to the consumer.

– But there are many factors that play a role in the pricing, not just the entry price for us, but primarily the tough competition in the grocery industry.

Several of TV2’s readers have asked why food that is good for public health cannot be cheaper. To that, Kristiansen replies that Coop has proposed that the authorities can reduce VAT on healthy products as a measure.

– We still have many healthy products at good low prices, both for fish and fruit and vegetables, he writes.

– We don’t cut corners

NorgesGruppen, which among other things owns Kiwi, Meny and Spar, did not want to answer any of TV 2’s questions, due to competition law.

Communications manager Kine Søyland, on the other hand, makes a general statement:

“We fully understand that people feel that it has become more expensive to shop for food, because prices have increased. The main reason for this is that the purchase prices from our suppliers have risen sharply, and that high electricity prices have led to increased costs for everything from transport to store operations. The increased costs affect the entire value chain for food.”

“We do not shy away from this situation in any way. Although the prices have gone up a lot, this is not something we make money from. We receive high price increases from our suppliers, which makes it more expensive to buy food. In addition, the costs of distribution, storage and especially electricity consumption in stores have risen a lot. Together, this causes our profitability to decrease. I think I speak for all players in the industry when I say that this is a situation we would rather be without.”