In late August, the government called in meat and other grocery sector organisations to explain the sharp rise in the retail cost of red and white meat products.
The country’s Ministry of Agriculture and Food used the talks to question the heads of food producer and retail organisations about the underlying reasons for the sharp increase in meat and grocery prices in June and July. The government’s economic model is tied to maintaining low level inflation. The ministry fears that escalating retail prices could inflame inflationary pressures and raise living costs.
"Retailers argue they are being forced to raise prices because food producers are charging higher prices. Meat producers suggest that the real increase in the recent price surge is the fault of retailers. We need to examine the root causes more closely," Sylvi Listhaug, Norway’s minister of agriculture and food, told a meeting of senior ministry officials in Oslo, on 29 August.
Food retailers are defending their pricing strategies, claiming that meat producers may be raising prices to compensate for falling consumer demand for certain types of meat, including beef and pork.
"The government used Statistics Norway figures as the basis for talks. These figures suggest retail prices jumped by 3.2% in June-July. We do not accept that. Our figures indicate a 1.1% increase. This largely relates to higher buying costs," Tom Kristiansen, CEO of the grocery retail group Rema 1000 International told GlobalMeatNews.
The ministry has established an expert panel to review producer costs and retail prices. "A month-to-month increase of 3.2% represents the single biggest such rise since 1982. We have concrete examples of price increases in stores that are greater than what is warranted. We need to look deeper," said Listhaug.
Officials from Kjøtt- og fjørfebransjens Landsforbund (KLF), Norway’s meat and poultry association, rejected the retail sector’s suggestion that its members were largely responsible for higher food costs.
"We have no information from members indicating they have negotiated better price terms for meat sold to grocery chains that could produce such a significant price jump. Prices did increase in June and July due to the new agricultural agreement, but the increase could not explain the 3.2% increase at retail level," the KLF’s CEO Bjørn-Ole Juul-Hansen told GlobalMeatNews.