Feb 2, 2023
Norwegian Grocers Reverse Price Hikes After Political Uproar
(Bloomberg) -- Some of Norway’s leading grocers have reversed price hikes they made earlier this week after the moves sparked criticism from the government and probes into potential competition issues.
Rema 1000, which raised prices by an average of 4.8% on Feb. 1, will lower them to January levels despite “clearly higher” costs for electricity and raw materials, as well as supplier price hikes, Tom Kristiansen, managing director for the food retailer, said in a website statement on Thursday. Rema 1000 rival Coop will take a similar step on about 4,000 goods, daily VG reported its spokesman Bjorn Takle Friis as saying.
The Nordic nation’s government announced a 10-step plan to stem food price growth on Wednesday, which included bolstering the competition watchdog’s authority and lowering the threshold for deeming an company as market dominant. Following media reports that some grocers raised prices by about 10%, the government also launched investigations into price signaling by the largest grocers and into price formation in food retailing.
Warnings of upcoming price increases may harm an industry with “too low competition” and “may even border on illegal price collusion,” Trade and Industry Minister Jan Christian Vestre was cited as saying by the NTB newswire last month. Prime Minister Jonas Gahr Store has also criticized the price hikes.
Norwegian authorities are struggling to rein in inflation and to avert a recession, as Norges Bank expects core inflation to have accelerated to 5.9% in January and February, partly due to food price hikes. The central bank, which has taken its benchmark rate to 2.75% from 0.5% in the last 12 months, believes price increases will gradually moderate during the spring.
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