Kiwi & Rema in Legal Trouble: Incorrect Pricing of Mackerel in Tomato?
Norwegian Grocery Chains Fined Billions for Price Coordination
Oslo, Norway – – Norway’s three largest grocery chains – NorgesGruppen, Coop, and REMA 1000 – have been penalized a total of NOK 4.9 billion (approximately USD 490 million) for engaging in illegal price coordination, according to a recent statement by the Norwegian Competition Authority. The fines, stemming from a six-year investigation, highlight a long-running practice of “price hunting” where competitors monitored each other’s pricing to stifle competition and maintain high grocery costs for consumers.
NorgesGruppen, which operates chains including KIWI, Meny, and Spar, received the largest fine, totaling NOK 2.3 billion. Coop and REMA 1000 were each fined NOK 1.3 billion. The investigation revealed that the chains employed individuals – dubbed “prisjegere” or “price hunters” – to electronically scan prices at rival stores, allowing them to quickly adjust their own pricing strategies in response.
Tina Søreide, leader of the Norwegian Competition Authority (Konkurransetilsynet), described the practice as “a serious violation of law.” The authority’s investigation found evidence of price monitoring extending from until at least . The coordinated effort, regulators claim, discouraged price reductions and facilitated price increases, ultimately harming Norwegian consumers.
The fines come as Norwegian consumers have long faced higher grocery prices compared to neighboring countries. While the exact financial impact on consumers remains unknown, the Competition Authority believes the coordinated pricing strategy artificially inflated costs. The authority has ordered the chains to immediately cease all price cooperation.
Dispute Over Kiloprice Calculation Adds Complexity
Adding another layer to the situation, the Forbrukertilsynet (Norwegian Consumer Authority) recently ruled on the correct method for calculating the unit price of products like mackerel in tomato sauce. The authority determined that the price per kilogram should be based on the weight of the mackerel itself, excluding the weight of the sauce. This contrasts with the practice of some retailers, who calculate the price based on the total weight of the product, including the sauce.
This ruling has sparked debate within the industry. Orkla, the producer of Stabbur Makrell, expressed disagreement with the Forbrukertilsynet’s interpretation, arguing that the sauce is an integral part of the product and should be included in the calculation. Orkla’s Communications Director, Dag Olav Stokken, stated the company seeks a broader approach to the regulation and is initiating discussions within the industry to ensure clarity and consistency.
Norgesgruppen’s Communications Chief, Kine Søyland, indicated the company will comply with the final conclusion of the authority. Rema 1000’s Category and Purchasing Director, Line Aarnes, acknowledged the Forbrukertilsynet’s statement and pledged to engage in dialogue with the authority and suppliers to ensure consistent practices across their product range.
The dispute over the kiloprice calculation highlights the potential for consumer confusion and the importance of transparent pricing. The Forbrukertilsynet emphasized that both producers and retailers share responsibility for ensuring accurate price labeling.
Impact on Market Share and Consumer Behavior
The fines and the scrutiny surrounding pricing practices could lead to shifts in market share among the major grocery chains. KIWI, part of NorgesGruppen, has consistently been identified as the perceived low-price leader in Norway, according to recent reports. However, the Forbrukertilsynet’s ruling on kiloprice calculations suggests that Extra, also part of NorgesGruppen, may be the only major chain currently adhering to the correct pricing methodology.
The long-term impact on consumer behavior remains to be seen. The increased awareness of pricing practices may encourage shoppers to more carefully compare prices and seek out the best deals. The Forbrukertilsynet hopes that the clarification of pricing regulations will empower consumers to make informed purchasing decisions.
The Norwegian Competition Authority’s actions signal a stronger commitment to enforcing competition law and protecting consumers. Marit Evensen, Under-Director at the Forbrukertilsynet, stated the authority expects Kiwi and Rema to align with the regulations, and will consider further action if necessary. The case serves as a warning to other companies operating in the Norwegian market about the consequences of anti-competitive behavior.