Sweden to open up food market to foreign players - Food Retailing

Eurofood, Nov 7, 2002

Sweden's Minister of Consumer Affairs, Ulrika Messing, said laws would continually be reviewed in order to make it easier for foreign and domestic competitors to establish their operations on the Swedish food market. For one thing, the building and plan directives at municipal level, which often have been abused in order to stop new players, will much likely be changed, according to Messing.

Messing was very critical towards local politicians for not allowing foreign companies to establish operations. "It has to become easier (for a player) to establish an operation here. There's an exaggerated concern, and which is uncalled for, in many municipalities," Messing said.

Several foreign food chains have tried or had plans of establishing operations in Sweden but were stopped or slowed down by bureaucratic red-tape. The latest is German discounter Lidl, which for years has announced plans to open up outlets in Sweden, but have none so far. In Finland, on the other hand, Lidl has already opened ten outlets with more on the way. There, Lidl has been able to undercut competitors prices by 10-15%.

The Minister of Consumer Affairs also acknowledged that there are strong local business lobbying against newcomers. In smaller communities, the typical situation is that there is an ICA and a Coop Sverige supermarket, splitting the market between them.

The situation in Sweden has led to a poorly competitive market, and, consequently, high food prices. Surveys show that Swedish food prices are some 20% higher than the EU average, and that is a major concern of the Minister's.

"Our goal is to lower Swedish food prices so that the gap to EU prices continuously keeps shrinking," Messing said. The Board of Fair Trade also welcomed regulatory tools that would enable it to bend open the tight Swedish food market to foreign players.

REJECTION

As expected, Swedish food industry officials in general rejected the idea that competition was not working in the market.

"Competition is working [...] food prices won't be any lower just because we bring in foreign players," said Axfood managing director Mats Jansson.

However, Jansson has a large patch of turf to protect. Axfood holds nearly 24% of the Swedish food market and together with ICA and Coop Sverige, the three control over 90% of the market.