What are Norway's food tariffs, and how do they affect grocery prices?
What are tariffs?
Tariffs are taxes and charges on imported products. Tariffs make food more expensive by increasing the cost of imported goods for suppliers, this is then passed onto consumers.
Furthermore, it ensures Norwegian producers can command higher prices without facing competition. The reason why Norwegian producers charge more is due to the high overheads for food production in Norway compared to other countries.
Examples of foods which Norway has tariffs on includes meat, dairy, and cheese imports. Fruit, vegetables, cereals and ready-made products are also subject to tariffs.
These tariffs can significantly increase the cost of foods. For example, the tariff on beef is 344 percent, while the tariff for cows milk is 443 percent.
Why the competition authority has criticised tariffs
The Norwegian Competition Authority has said that tariffs on foreign foods needed to be examined due to their effect on supermarkets' competitiveness.
'Customs cannot remain untouched,' Beate Berrefjord, director of the Norwegian Competition Authority, told public broadcaster
NRK
.
'Tariffs on food are the biggest obstacle to improving competition. We don't want Norwegian agriculture to die, but customs protection has remained untouched for many years. Now it's high time to make adjustments,' Berrefjord added.
Public broadcaster NRK reports that half of everything sold in Norwegian supermarkets was affected by various protectionist measures.
'We have to be honest: Tariff walls affect competition. It is a political question whether it is okay to weaken competition to protect agriculture. But we would like to see people open to changes for the sake of competition,' Berrefjord said.
Associate professor of economics Ivar Gaasland at BI Bergen recently told the public broadcaster that
removing import protections would lead to food being about 20 to 30 per cent cheaper
.
Berrefjord said that while tariffs protect farmers, suppliers and grocery chains were also protected from competition that could drive down prices.
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The argument for keeping tariffs
Geir Pollestad, former agriculture minister and MP for the agrarian-focused Centre Party, said that tariffs were important for food security.
'Food production is also a security policy and emergency preparedness. Here, supervision goes far beyond the task at hand,' Pollestad said in reference to the competition authority's views on tariffs.
Politicians in Norway have long wanted to ensure that the sale of Norwegian food remained high and Norway's agriculture industry remained viable to ensure food security. The more food Norway is able to produce, the more self-sufficient it remains.
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