Questions and answers regarding the pre-labelling of meat products

Will the changes lead to products not being priced?

Nothing in the Competition Authority's decision necessitates that food products are not reasonably priced. The law applies to price labelling. No. 57/2005, on the supervision of business practices and marketing, and rules No. 725/2008, on price marking and other price information. The Consumer Authority monitors the implementation of these regulations. Food retailers are, of course, required to price their goods in accordance with applicable laws and regulations. This is particularly emphasised in the aforementioned decision of the Competition Authority.

There have been instances where staff and representatives of Bonus have justified inadequate price labelling in their stores by referring to a decision by the Competition Authority. In light of the above, this explanation cannot be upheld.

How will meat products be labelled from now on?

It is the responsibility of grocery stores to ensure that price labelling is reasonable and in accordance with the rules of the Consumer Authority. For example, supermarkets can price-mark packs of a standard weight (all of the same weight) with shelf-edge or peg-board pricing, as is common for many everyday goods. Supermarkets can also price each individual package themselves. Shops have until 1 June to implement price labelling for non-standardised products (e.g. leg of lamb, trays of turkey breasts, etc.). The Consumer Agency is now considering changes to the rules on price labelling, which will set out how barcodes can be used for price labelling on non-standardised products. This refers to so-called price scanners (or barcode scanners) being made available to shop customers, allowing them to pass barcodes over the scanners and thereby obtain information on the price of each unit, even if each package varies in weight.

Will it become more difficult for consumers to understand the prices of these products in future?

No, not if supermarkets comply with the laws and regulations on price labelling. Supermarkets are required to ensure that a price label is clear, accessible and legible so that it is obvious which product or service the price label refers to.

In one respect at least, it will instead be easier for consumers to understand the retail price. This will greatly reduce the need for consumers to do mental arithmetic over the various discounts that have traditionally been offered, a percentage discount often applied from a price that has never even been in effect.

Do the changes affect the labelling of weight or the sell-by/use-by date?

Nothing in the Competition Authority's decision provides any cause for this. Meat processing companies continue to label their products with their weight, the date of production, and the last date for sale or consumption.

Will the changes lead to a lower price for the relevant products?

The changes create the basis for more effective price competition between shops that sell these products. Price surveys have repeatedly shown that the price of pre-packaged meat products has invariably been the same among competing supermarkets. From now on, each shop or retail chain will set the price of its own products independently. In the long term, this competition should lead to lower prices than would otherwise have been the case.

Will the changes lead to a higher price for the relevant products?

It has been argued that the changes lead to significant additional costs for retailers, who now have to make expensive alterations to their shops and handle price labelling in a less efficient manner than before. The Competition Authority does not believe this has to be the case. For example, the Competition Authority's observations do not suggest that so-called price scanners are the kind of investment that would need to affect retailers' prices for the relevant products. It is also worth pointing out that now that meat processing companies are stopping the price labelling of products, with its associated costs, this should even create scope for a reduction in the wholesale price of the relevant products, as the detailed negotiations between meat processing companies and supermarkets over retail prices are eliminated.

However, what matters here is the approach shops take to pricing. It must be assumed that they seek cost-effective methods in this regard.

Is Högum completely forbidden from giving discounts?

The decision does not in any way limit the scope of Haga or other retailers to offer discounts from a price that has been in effect and available to consumers. The opaque pricing, which involves offering discounts from a price that has never been in effect, should, however, be a thing of the past.

It is important for consumers to bear in mind that many shops (especially discount stores) have long offered a fixed 5-10% discount on pre-packaged meat products. As mentioned, these discounts will be a thing of the past. A product previously pre-priced at, for example, 1,000 kr. should, following the changes, be priced by the shop at 900 kr. if a 10% fixed discount has been applied to the product in that particular shop.

Will the product range be reduced?

Some players in the food market claim this. The Competition Authority cannot see that changes to price labelling lead to such an inconvenience for retailers that they would need to reduce their product range.

Can one trust that products labelled as standardised on a shelf Are they all really in the same weight class?

Many meat processing companies have the equipment that allows them to standardise the weight of a product accurately, or within the tolerance limits permitted by regulations. The changes will likely lead to meat processors standardising the weight of more products than has been the practice to date. This is to the benefit of consumers.

Do meat processing companies need to recall products that are pre-labelled but have not been sold by 1 March?

No, nothing in the Competition Authority's decision calls for that.

Do large producers or suppliers, other than meat-processing companies, mark retail prices on products sold under the labels of the respective supermarkets, e.g. products sold under the supermarket's own labels? (one supplier – one retailer)

An investigation into the pre-labelling of meat products revealed that the pre-labelling was based on dealings between Haga and the relevant meat processing companies which constituted a breach of competition law. In order to remedy these infringements and create the conditions for effective competition, the companies concerned agreed to a ban on pre-labelling in this sector.

Competition law does not unequivocally prohibit manufacturers or suppliers from labelling products with a recommended retail price specifically for certain supermarkets or other retailers, if the recommended retail price is determined entirely by the latter. Experience, however, shows that such a practice can lead to unlawful interactions between a manufacturer or supplier, on the one hand, and a retailer and reseller, on the other. It is always the responsibility of the parties concerned to ensure that this does not happen.

Can major suppliers mark their products with a recommended retail price? (one supplier – many resellers)

With reference to the conclusion of the Competition Authority in its decision No. 33/2010 It is important to ensure that no communication or cooperation takes place between sales stages, e.g. between wholesalers and retailers, regarding retail prices or discounts from the retail price (vertical price-fixing). It is a general principle of competition law that a retailer independently sets the retail price of the products it sells.

However, competition law does not categorically prohibit suppliers from issuing recommended retail prices or marking their products with recommended retail prices. Such conduct can be justified in certain circumstances, but each case must be considered on its own merits. One of the considerations is that such price marking has often led to almost all resellers offering such products at the recommended price. This type of price marking may restrict price competition and contravene Article 10 of the Competition Act.

Where can I report if I believe that the price labelling in grocery stores does not comply with the law and regulations?

The Competition Authority provides further information on its decision. No. 33/2010 and its conditions. The Consumer Authority, however, accepts complaints about inadequate price labelling in shops.