Norway retail pricing of chicken under spotlight

By Gerard O’Dwyer, in Helsinki

- Last updated on GMT

Related tags Agriculture Meat Poultry

The retail price of chicken has increased despite over-supply
The retail price of chicken has increased despite over-supply
Norway’s Ministry of Agriculture and Food has included poultry products in its investigation of meat production and retail prices following fresh data indicating a sharp 7.1% price rise, despite an over-supply situation, in retail chicken prices between March and August.

The report from the country’s Directorate of Agriculture, which advises the ministry on industry competition and agricultural policy matters, takes place while consumer organisations lobby government to introduce stricter fair trade practices and rules to stimulate retail price competition.

"Our research shows that the wholesale price of chicken rose by 1.2% in the same period,"​ said Jørn Rolfsen, the directorate’s general director. The figures are supported by independent price research from Statistics Norway, a government agency.

Meanwhile, Norway’s Meat and Poultry Association (Kjøtt- og fjørfebransjens Landsforbund) says price pressure is not emanating from producers whose base operating costs are unchanged. Its administrative director Bjørn-Ole Juul-Hansen argued to GlobalMeatNews: "It is important to look at all parts in the supply chain to understand why retail prices on chicken have risen. The industry is working to resolve over-supply, and more rules are not needed."

The ministry has asked Bioforsk, the Norwegian Institute for Agricultural and Environmental Research, to interpret and rationalise Norway market prices for meat and poultry products, helping it frame a policy response.

"At first glance the figures do not make sense. With the sector in over-supply, the price trend should be in the opposite direction, or marginally higher based on the wholesale price,"​ Mads Svennerud, a senior adviser at Bioforsk’s statistics and analysis unit told GlobalMeatNews.

The retail industry is also struggling to explain the figures. Virke, the enterprise trade organisation that represents grocery retailers, denies retailers are engaged in a margin-padding exercise.

"It’s clear that retail prices on chicken have risen significantly in the past half year, but it is wrong to assume stores are purposely raising prices to bolster margins,"​ said Johanne Kjuus, the head of Virke’s analysis and industry development department. She told GlobalMeatNews the shelf prices on chicken may be influenced by a desire by retailers to increase prices after a "sustained period" of low margins.

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