Health minister wants to stop cheap beer

Grocery chains in Norway have launched a price war on beer in order to attract customers. The Minister of Health claim the price war is breaching the alcohol law.

The Norwegian Minister of Health Dagfinn Høybråten is upset by the current price war raging between grocery chains in Norway. He claims the practice is against the alcohol law.

«I, as the leader for the Christian Democrats (KrF), react because the grocery chains evidently use beer as a good to tempt customers to the stores,» Høybråten said to Kanal 24. «I experience this as a direct conflict with the alcohol law.»

Høybråten said that he claims there ought to be good reasons for the Ministry of Social Affairs to react on the grocery chains dumping of the beer prices.

«I assume that Norwegian authorities will look into this,» Høybråten claimed. «The Directorate of Health and Social Affairs has asked for a complete statement, and there is a good reason to do so.»

Høybråten had to admit that beer is a convenience good, but he denied that it should be possible to use the product as a means of competing for customers.

«There is a special competition regulations connected to alcoholic goods, and all serious players must accept this,» he said.

The war led to a new low on Thursday, when Rema 1000 lowered its price on Grans Premium to NOK 6.50 (USD 0.94) per bottle. Kiwi sold beer for the same price Thursday. Rema’s decision to lower the price on the beer came after the Trondheim based chain Bunnpris lowered its price on its beer brand Seidel to NOK 7.90 (USD 1.15) Wednesday. Coop reacted by immediately cutting its prices even more and launched Coop Pils at NOK 7.50 (USD 1.08).

The government demands NOK 5.33 (USD 0.77) in taxes for a 0.33 litres bottle of beer. VAT is added in addition to the duties, which results in NOK 6.61 (USD 0.95) in duties to the state per bottle. With a price of NOK 6.50 (USD 0.94) it is apparent that the stores are not making any earnings on their sales.

«The market price has been greatly reduced on these types of products lately. This is the reason why we now lower our prices,» stated Geir Solstad, executive director of Rema 1000, to TV 2 Nettavisen Thursday.

One of the reasons why the beer war has been unleashed is that the German grocery chain Lidl is about to enter the Norwegian market. The chain is known for selling beer cheap in order to lure customers to the stores.

Rema 1000 allegedly evaluated the lawfulness of reducing price of alcoholic beer, and found that it was not against Norwegian law to reduce the prices significantly.

According to Norwegian law, alcoholic beverages are not be sold as bargain products.Minister of Social Affairs Ingjerd Schou asked the Directorate of Health and Social Affairs Thursday to evaluate the lawfulness of the price cuts instituted by grocery chains. It is expected that a conclusion will be presented within two and three weeks.

«The information presented Thursday indicates that the law have been breached,» said Bjørn-Inge Larsen, director of the Directorate, to the Norwegian paper VG.

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