NEWS ANALYSIS: Norway’s notoriously high food prices are higher than ever, and that’s led to another round of political debate this spring. Food price issues often come up prior to national elections but not much changes, mostly because of Norway’s own high tariffs on food imports that can make Donald Trump’s pale in comparison.
The main reasons for the high prices simply don’t go away. They include high tariffs on food imports to protect Norwegian farmers, the high production costs of the meat, poultry, dairy products, fruit and vegetables that Norwegian farmers pass on to buyers, and the practice of dumping over-production abroad instead of selling it at a lower price in Norway. There’s also an alleged lack of competition among Norway’s few and highly profitable grocery wholesalers and retailers that dominate the market. In some cases, companies control both wholesalers and retailers.
These are all issues that have cost Norwegian consumers dearly for decades but are so embedded in the food delivery system in Norway that politicians usually fail to make any major changes. Prime Minister Jonas Gahr Støre and his Labour Party’s minority government has nonetheless mounted another attempt this spring to tackle the problem.
“Food prices have been going up in ways not seen before,” Støre told members of the Foreign Press Association at a meeting in Oslo early last week. Støre stressed how prices have shot up at a rate much higher than Norway’s current inflation rate of less than 3 percent, with the price hikes on some grocery items rising into the double-digits.
A few hours later, the prime minister followed his predecessors during the past two decades in trying to “do something” about it, less than four months ahead of the September 8 election. He announced a series of measures aimed at “improving competition in the grocery business” that include “better price information” for consumers, unfettered site access for grocery stores so new ones can more easily open near competitors, more transparency between retailers and wholesalers and more openness within the value chain for food. Consumers should know, Støre argued, how prices rise from production to the grocery store shelf.
By the end of the week, Støre and his business and trade minister Cecilie Myrseth had called in key players “in all food sectors” to a series of “marathon meetings” with the biggest players in the grocery business. They included the three retailing giants NorgesGruppen, Reitan Retail and Coop, home grocery delivery firm Oda and major producers Orkla and Nortura (the farmers’ cooperative handling most poultry and meat sales). NorgesGruppen alone dominates the retail market with its chains of grocery stores that include Meny, KIWI, Joker, Jacobs and Spar in Norway, among others, while Reitan controls the REMA grocery store chain. All told, Norwegians buy 95 percent of their groceries through the three giants, when they’re not driving over the border to Sweden where food can be much cheaper. A cucumber in Sweden often costs less than the equivalent of NOK 15, when it costs NOK 24.90 or more even at a “low price” KIWI or REMA store in Norway.
Myrseth noted at the outset that the “competitive challenges” in Norway’s grocery sector are “complex” and difficult to tackle. “We must be honest (in admitting) that there are no simple means” of solving the problem of food prices that many agree have risen too high. She and Støre hope, however, that the measures as a whole can “over time have an effect on competition.”
The meetings themselves weren’t open to the press. At a press conference afterwards Støre claimed the meetings were “useful” but had to admit that “the work with (bringing down) food prices isn’t over.” He said he and his government colleagues had posed lots of questions, and there were “a lot of answers” but they weren’t good enough.
“We have asked why the price growth has been (as high) as it has, without getting a clarification,” Støre said, while promising to “continue the work to make competition function.” The retail chains insist they do compete, to the point that until recently they regularly checked shelf prices at their rivals and matched them, until competition authorities objected to the practice and they dropped it. The ongoing similarity in grocery prices and their huge profits suggest otherwise.
NorgesGruppen, for example, recently reported another big jump in profits to NOK 4.9 billion, up from NOK 4.5 billion in 2024. Asked why the family-controlled firm can’t give up some of that to lower food prices, NorgesGruppen CEO Runar Hollevik told newspaper Dagens Næringsliv (DN) that the company reinvests much of its profits in “efficient operations” and needs to secure jobs for its 45,000 employees. “It would be irresponsible,” Hollevik claimed, to not operate profitably, adding that “most all of the money we earn is used to reinvest.”
Farmers’ representatives were noticeably absent from the government’s meetings that were aimed at lowering food prices. The government opted to direct its attention at the grocery business instead of challenging Norway’s own highly protected agricultural industry. Farmers also just received another billion kroner in direct subsidy in addition to all the import tariffs and other forms of protection they receive.
Many economists and researchers believe that’s where the core problem behind Norway’s high food prices lies, but the protectionism is so deeply embedded that politicians either fail or avoid trying to change it. “It’s all about shielding your own producers, so that we can have Norwegian mat production all over the country,” Olav Chen, an economist at Storebrand Kapitalforvalting (capital management) told state broadcaster NRK recently. Ivar Gaasland, an assistant professor at Oslo business school BI, noted that the tariffs “are extremely high, several hundred percent on some items.”
Norwegian farmers also received record-high support packages from Støre’s own government over the past three years when it included the farmer-friendly Center Party that caters to a rural constituency. Center and its leader, former Finance Minister Trygve Slagsvold Vedum, left the government in January and this year’s settlement with the farmers’ organizations was lower: They asked for around NOK 2 billion, were initially offered NOK 805 million and settled for NOK 1.1 billion, but have enjoyed what commentator Kjell Warner called an “historic” boost in their fortunes since the current government took over in 2021.
From 2021 to 2024, the government Støre led played a major role in boosting farmers’ income and maintaining their controversial tariff protection even though many farmers always want more. Economist Gaasland notes how Norway places a stunning 443-percent tariff on any import of milk and lamb, for example, along with 344 percent on beef and 277 percent on cheese. Wholesalers and retailers have to pay that tariff on any imports that compete with locally produced milk, lamb or cheese, before adding a profit for themselves.
Such tariffs make even some of US President Donald Trump’s seem low in comparison, and explain how one imported T-bone steak can cost the equivalent of USD 50 in Norway. Tariffs in general have become a thorny issue for Norwegian officials: They oppose tariffs imposed by other other governments against Norway (not least the new US government) but use tariffs themselves to keep much cheaper (and often better quality) produce, meat and dairy products from abroad out of the Norwegian market.
Agricultural products can still be imported, but end up with the same high prices for lamb, for example, that a Norwegian sheep rancher would charge, resulting in the even-higher prices a consumer eventually faces. Lamb and beef can cost the equivalent of USD 30-40 per pound in Oslo, even when the Norwegian krone is weak, while four medium-sized but tasty tomatoes from abroad cost NOK 49 at the Coop grocery chain this week. That amounts to USD 1.22 per tomato, higher than the less-tasty tomatoes grown in Norway.
Meanwhile, a package of the major Norwegian dairy cooperative Tine’s sliced Norvegia cheese, for example, has jumped from NOK 24.90 to around NOK 29 at the so-called “discount” grocery stores like KIWI and REMA, and even more at others. KIWI and REMA have likely had to pay more for it from Tine, and passed on the increase. A small pot of parsley has risen from NOK 12.90 to NOK 16.90, suggesting produce supplier Gartner has also charged the retail chains more for it. Those are huge increases of as much as 20- to 30 percent that are otherwise hard to explain. Støre still hopes he’ll get an explanation soon.
Fish and seafood prices have also gone up, mostly because of market factors. A vacuum-packed salmon loin that used to cost NOK 69 at KIWI and NOK 89 at a Meny grocery story (both owned by the huge NorgesGruppen grocery firm) has nearly doubled since the pandemic ended. Seafood producers blame higher costs they’ve passed on themselves, along with how restaurant owners abroad have been willing to pay more for fresh seafood and especially king crab, so the producers also charge higher prices in the domestic market. King crab, which has skyrocketed from around NOK 299 per kilo to more that NOK 1,200 a kilo in recent years, has all but priced itself out of the domestic market in Norway leaving many consumers bitter.
A majority continues to not seem so bitter about the economists’ core reason for rising food prices in Norway: The ever-rising prices charged by farmers’ cooperatives and the lack of competition from imported meat and produce when it’s in season in Norway. While meat prices don’t change, celery still drops to below NOK 20 when Norwegian farmers aren’t producing it off-season, but will surely rise again to more than NOK 30 when Norwegian celery hits the domestic market this summer.
Farmers continue to avoid much complaining about this, since farming is still viewed as a means of keeping rural areas populated, trying to keep farms in families and raising self-sufficiency. Norway has a high degree of self-sufficiency when fish and other seafood are added to the equation, but farm lobbyists often choose to overlook the fishing industry as one of the country’s biggest sources of food, to boost the need for farming.
Norway’s competition authority (Konkurransetilsynet), meanwhile, worries that Norway’s high tariffs on food imports also protect the grocery giants, because they can also keep foreign retailers and wholesalers out of the market. It’s likely to continue monitoring food price development and do what it can to boost competition in the market.
Kari Elisabeth Kaski, a Member of Parliament for the Socialist Left party (SV) that’s among those supporting tariffs to protect farmers, acknowledged this week that a family of four saw its annual grocery bill rise by 33 percent in the three years leading up to last year, when prices jumped even higher. She went so far as to admit that a popular form of locally produced liver paté has risen 80 percent, called that “unacceptable” and proceeded to place most all the blame for high food prices on the grocery companies.
Kaski has suggested imposing laws on them like those used in the US more than 100 years ago to break up huge companies like Standard Oil, American Tobacco and National Cash Register. She thinks it’s time to forcibly break up the three highly profitable grocery firms that control most of the market in Norway. In a commentary published Tuesday in DN, she referred to them as an “oligopoly” and urged “breaking them up,” and ridding them of any means of keeping other wholesale or retail players out of the market. She wants Norway’s competition authority to be able to force companies like NorgesGruppen to sell off parts of their businesses.
She made no mention of farmers’ contribution to high food prices, or reducing their protection. “We must all have food, and the willingness to pay for it will always be high,” she wrote. Støre’s Labour Party needs SV’s support in the upcoming election, along with that of his former government partner, the Center Party. It’s now calling for removal of Norway’s 15 percent tax on food, but that’s quickly been branded as a tax cut, not a reduction in food prices that Center’s constituency wants to keep high.
Meat and poultry cooperative Nortura, meanwhile, announced right after Støre’s and Myrseth’s meetings with the grocery companies that prices will rise again this summer. Beef prices will go up by 2.7 percent, while eggs will rise 7.17 percent.
NewsinEnglish.no/Nina Berglund