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17 December 2009
The Competition Authority recently informed Norwegian grocery chains that it is to extend their obligation to notify it of agreements with 19 dominant suppliers. The existing notification obligation was introduced in 2005 and will now continue until 2015.
Four large, vertically integrated grocery chains with a joint market share of more than 98% dominate the Norwegian grocery market. The supply side of the market is also heavily concentrated. With respect to a large number of products, there is either only one or a few suppliers. Import restrictions permitted under the European Economic Area Agreement that protect the agriculture and food industries are an important reason for this, while transport costs and consumer preference may also play a part. Investigations show that Norwegians pay 49% more for food and non-alcoholic beverages than the average European consumer, and 39% more than in neighbouring Sweden.
So far, the authority has taken steps to reduce information exchanges among the grocery chains. Following the authority's intervention, the parties chose to amend their practice of weekly price exchanges through market analysis firm ACNielsen. The authority also fined major dairy product supplier TINE for exclusionary practices during annual negotiations with the grocery chains. The authority's decision in TINE was overruled by the City Court and is now pending before the Court of Appeal. However, in spite of continued focus on competition in the grocery market, concentration has increased rather than decreased as new entrants have left the market. The purpose of the obligation to notify is to enhance the authority's ability to investigate and assess anti-competitive practices. Statements made to the press by authority officials indicate that it may focus more on the supply side of the grocery market.
For further information on this topic please contact Monica Syrdal or Heddy Ludvigsen at Advokatfirmaet Hjort DA by telephone (+47 2247 1800), fax (+47 2247 1818) or email (email@example.com or firstname.lastname@example.org).
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