Norwegian co-op dismisses unfair competition accusations
allegedly abusing its market position after it was said to have
paid a grocery chain to force a competitor's products off its
shelves, Tom Armitage reports.
According to reports in the Norwegian press, Tine allegedly paid ICA Norge, a Norwegian subsidiary of troubled Dutch retail giant Ahold, NOK16 million (€1.9 million) to remove rival dairy firm Synnøve Finden's products from its shelves.
Last year, Synnøve Finden's branded cheese products disappeared from the shelves of Norwegian retailer Rema 1000 - leaving Tine's cheese brands, including Jarlsberg, Ridder and Ski Queen in a dominant, unchallenged retail position.
For many years the state-supported dairy co-operative, owned by 19,400 member-farmers, has dominated the domestic Norwegian dairy sector, with its eponymous milk establishing itself as the sole milk brand across Norwegian grocery stores throughout the last decade. A 2001 survey by pollsters Gallup found Tine to be the most recognisable domestic brand among Norwegian consumers.
Recently, however, the Norwegian dairy sector has become more competitive, following rival product launches from Synnøve Finden, which manufactures a number of Synnøve-branded dairy products, including traditional cheeses and yellow fat spreads.
Tine notched up turnover of NOK13.4 billion (€1.6 billion) in 2003, while Synnøve Finden, also its nearest competitor, managed a considerably smaller turnover figure of NOK174.6 million (€20.8 million).
Although Tine has consistently denied any wrongdoing, the company is still facing the backlash from Norwegian consumers, together with Norway's Modernising Minister, Andreas Meyer who branded the competition rigging allegations as "unacceptable".
According to a survey commissioned by Norwegian newspaper VG soon after the accusations surfaced, 84 per cent of Norwegian consumers said it was important to have a variety of cheese products on retailers' shelves, while a further 67.1 per cent claimed they have since lost confidence in Tine's brands.
Konkurransetilsynet, Norway's competition authority, is currently investigating the claims and if the allegations are upheld, Tine can expect heavy fines. A spokeswoman for Tine said that the allegations would be discussed at a board meeting on Monday.
The co-operative quickly countered the recent competition fixing allegations by suggesting that ICA Norge demanded fees in return for the favourable placement of Tine's products on its shelves - not an uncommon practice among Scandinavian (and other European) multiple retailers.
ICA is Scandinavia's number one grocery retailer, operating approximately 2,800 member stores.