4 ms·

Top three grocery companies in Norway, which have almost the entire grocery market here between them, just got fined[1] for price collusion. They'd signal risi

Top three grocery companies in Norway, which have almost the entire grocery market here between them, just got fined[1] for price collusion. They'd signal rising prices for a category by rising the price on certain products within that category, was one accusation. Extensive use of price scouts aided in this. Initially the fine was much larger, but ended up at about 450M USD total between the three. For comparison, the larger company had roughly the same amount as profit before taxes[2] in 2023. The recent heavy inflation in grocery prices has been far greater than what say the farmers got for the raw products. That said, here in Norway we have a ridiculous amount of smaller, local grocery stores, rather than fewer larger ones here and there. As I sit here, in the outskirts of Oslo, within a 15 minute walk I have 8 grocery stores, all from the top three. [1]: https://www.nrk.no/norge/daglegvare-etterforskinga_-4_9-milliardar-i-gebyr-til-coop_-norgesgruppen-og-rema-1.17010641 https://www.nrk.no/norge/daglegvare-etterforskinga_-4_9-mill... [2]: https://www.dn.no/handel/resultathopp-for-norgesgruppen-tjente-43-milliarder-for-skatt/2-1-1615748 https://www.dn.no/handel/resultathopp-for-norgesgruppen-tjen...

jahnu 2y ago
I am almost convinced this is happening here in Austria too. I have to be open to the possibility it’s just my imagination but damn it feels too suspicious at times. Haven’t seen anything in the news, however.
- vjerancrnjak 2y ago
  There's a whole thread here on Austria: https://mastodon.gamedev.place/@badlogic/111071396799790275 https://mastodon.gamedev.place/@badlogic/111071396799790275
acchow 2y ago
For how many years did this collusion last? What percentage of their annual profit could be attributed to price collusion? Norgesgruppen's 2005 annual report shows a profit margin of 2.2%. In 2021, that ballooned to 3.8%. That's almost a 75% growth in margin.
- magicalhippo 2y ago
  Good question. I worked for one of them around 2005, and my boss mentioned price scouts then. As I recall it he wasn't happy about them, equating it with cheating. The allegations are that the price collusion really took off around 2010. We had had a few foreign companies trying to take hold, like ICA in 2003 and Lidl in 2004. Lidl faced a unified publicity attack by the big three, and didn't last long. ICA bought one of the then-larger chains, but couldn't make it work and gave up in 2015. It wouldn't surprise me if the "big three" started working more closely together during the "Lidl invasion", and that that laid the foundations for further cooperation later.
- semi-extrinsic 2y ago
  Their reported profit margins are also super suspicious, TBH. Because the grocery chains have subsidiaries that are almost always the owner of the real estate where the stores are located. So they can just set the rent cost of the store in order to get whatever profit margin they deem acceptable. Then the real estate subsidiary turns around and spends most of their profits buying more real estate. You see it almost everywhere now, grocery subsidiaries buying up whole blocks of nice hhouses, just to demolish them and build ugly concrete cubes with yet another grocery store on ground level and stacks of tiny apartments on top. The best thing that can be said about these buildings, is that hopefully teachers in a few decades can use them as clear examples to show children just how bad it gets when we let rent seeking MBA fuckers decide things.

jahnu 2y ago

I am almost convinced this is happening here in Austria too. I have to be open to the possibility it’s just my imagination but damn it feels too suspicious at times. Haven’t seen anything in the news, however.

vjerancrnjak 2y ago
There's a whole thread here on Austria: https://mastodon.gamedev.place/@badlogic/111071396799790275 https://mastodon.gamedev.place/@badlogic/111071396799790275

acchow 2y ago

For how many years did this collusion last? What percentage of their annual profit could be attributed to price collusion? Norgesgruppen's 2005 annual report shows a profit margin of 2.2%. In 2021, that ballooned to 3.8%. That's almost a 75% growth in margin.

magicalhippo 2y ago
Good question. I worked for one of them around 2005, and my boss mentioned price scouts then. As I recall it he wasn't happy about them, equating it with cheating. The allegations are that the price collusion really took off around 2010. We had had a few foreign companies trying to take hold, like ICA in 2003 and Lidl in 2004. Lidl faced a unified publicity attack by the big three, and didn't last long. ICA bought one of the then-larger chains, but couldn't make it work and gave up in 2015. It wouldn't surprise me if the "big three" started working more closely together during the "Lidl invasion", and that that laid the foundations for further cooperation later.
semi-extrinsic 2y ago
Their reported profit margins are also super suspicious, TBH. Because the grocery chains have subsidiaries that are almost always the owner of the real estate where the stores are located. So they can just set the rent cost of the store in order to get whatever profit margin they deem acceptable. Then the real estate subsidiary turns around and spends most of their profits buying more real estate. You see it almost everywhere now, grocery subsidiaries buying up whole blocks of nice hhouses, just to demolish them and build ugly concrete cubes with yet another grocery store on ground level and stacks of tiny apartments on top. The best thing that can be said about these buildings, is that hopefully teachers in a few decades can use them as clear examples to show children just how bad it gets when we let rent seeking MBA fuckers decide things.