Food, the powerful and the powerless

The Food Chain Committee's power analysis, “Food, power and powerless – on the relative strengths in the food value chain,” shows that over time, the major food retail chains have increased their power relative to the other links in the value chain.

- The Food Chain Committee has conducted a thorough study of the relative strengths in the value chain and has identified a strong change in the relative strengths in favour of retail. The findings of the Food Chain Committee are completely in line with corresponding studies conducted in other countries. The changes the committee have identified are of such a scope and character that further political follow-up is required, says minister of Agriculture and Food Lars Peder Brekk.

• See the presentation live on Web-TV (in Norwegian)
• The powerful and the powerless in the food supply chain (pdf, 544 Kb)

- This report is an important contribution to the further debate on how the production and distribution of our food may be in the consumers’ interests. The report will create further discussions on the power relations in the food supply area, and this is a necessary debate, Minister of Government Administration, Reform and Church Affairs Rigmor Aasrud says.

- The Food Chain Committee has delivered several extensive proposals which may interfere in the relations between the producers and the grocery retailer chains. This may have an influence on the competition between the chains. The effects on the competition are not necessarily obvious. The report is now being presented for consultation with relevant groups and authorities. This consultation round will have an effect on the efforts to strengthen competition throughout the entire food value chain, Ms Aasrud says.

- The Food Chain Committee identifies important challenges relating to power relationships, transparency and information on market mechanisms and products. I would like Norwegian consumers to have a broader selection and greater diversity in stores in the future. This study contains several interesting proposals with this in mind, says Minister of Children, Equality and Social Inclusion Audun Lysbakken.

- We appointed this committee to find solutions that can increase confidence among consumers, and we are willing to follow up with political action to achieve those targets, says Lysbakken.

The Committee proposes introducing legislation to ensure fairness in negotiations and good trade practices. The law will ensure consumers reasonable prices, wide selection, good quality and easy availability. To ensure enforcement of the law, the Committee proposes an ombudsman. The Committee also proposes a grocery portal and better food labelling. In addition, the Committee calls for the authorities to consider the need for a separate Franchise Act similar to the one in Sweden.

The Food Chain Committee has examined the entire value chain, including suppliers and the food industry. Among the suppliers, the largest can determine the terms for the strongest brands, while other suppliers, primary producers and retailers have little influence and insight into their own terms. The Committee is of the opinion that further developments favouring retail will result in a power imbalance in the food value chain. This will be detrimental to healthy competition to benefit consumers.

The Committee has uncovered factors that it believes may be characterized as unreasonable business practices. Such factors may have consequences for consumers in the form of selection and prices, and are also significant for the development of the entire food value chain. These factors are not currently subject to regulation. The EU is working on corresponding studies of unreasonable business practices and different measures are being discussed. Countries such as France and England have already drawn up legislation. The Committee's chairman, Einar Steensnæs, participates in the EU's High Level Forum working on this subject.

- The Committee's study shows that retail no longer is merely retail, but also controls distribution, purchasing and to an increasing degree industrial and primary production. Retail thus emerges as a competitor toward its other suppliers. This power shift, which is also taking place internationally, emphasizes that it was important and far-sighted to appoint the Food Chain Committee, says Lars Peder Brekk.

Press Contacts:
Ministry of Agriculture and Food, Ottar Løvik, + 47 48140477
Ministry of Children, Equality and Social Inclusion,
Maria Brit Espinoza, + 47 91559673
Ministry of Government Administration, Reform and Church Affairs,
Frode Jacobsen, + 47 99523495