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11 June, 2004

Eggs $4 a dozen

Aftenposten reports statistics from Eurostat  which show that Norway has the most expensive food in Europe, a typical grocery bill being 56% above the EU average.

Is this news? I understand it's partly due to the generally high cost of living, but also the limited competition between a relatively small number of retail chains. For a while, it looked as if that might change, as Lidl, the German grocery retailer, is trying to enter the Norwegian market with 65 new stores.
However, local authorities are using planning regulations in an attempt to block the new stores and only this week, Aftenposten also reported that the established Norwegian retailers are openly forming a distribution cartel. With a population of only 4.5 million spread across a country over 1500 miles (2400km) long, getting goods to customers is a very significant constraint.

If competition leads to fairer prices for consumers, great, even if that means Lidl is treated unfairly, but it's interesting to see such practices are so overt; in the context of international trade and the EU (Norway isn't a member, and the latest polls were still 48% "Nei til EU"), this somehow feels parochial, even outdated.

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