Norwegian butter crisis (2011) | Hacker News Reader

Norwegian butter crisis (2011)

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One of the things I hate most about living in Norway are the food prices and selection. The government allows two main cooperatives: Tine - milk and dairy products, and Nortua - meat products, to monopolize the market, and maintain high tariffs that prevent foreign foods from offering price competition. This allows farmers to maintain small, inefficient farms that produce rather substandard products (Norwegian beef is about as tasteless as you can find).

For dairy, a smaller company Q started about 15 years ago and is probably helping to keep milk prices down a bit since Tine actually has some competition now, but not nearly enough to bring prices down to what you would find across the border in Sweden, for example.

Unfortunately the grocery store situation doesn't help much either. The largest company - NorgesGruppen - controls almost 40% of the grocery stores. The bulk of the remainder are owned by two others. There is very little price competition, and the selection is still very limited, although it is starting to get a bit better (I've been living here almost 7 years now).

If you live close enough to Sweden, and have your own car (or have friends who go frequently), you can save a ton of money on food and alcohol by heading across the border and doing your shopping there. Unfortunately, it's about 1.5 hour drive from Oslo, so I don't have an opportunity to go very often. It's a funny thing, Norwegian politicians tried to pass going over the border off as a "low class" act, and there's even a derogatory term "harrytur" to describe it, but it's still something that everyone does, regardless of income, simply because the price difference is so great.

As I understand it, NorgesGruppen (and the rest of the grocery cartel) are the largest part of the problem. They are very effective at keeping smaller actors out of the market, as evidenced by the whole Hval sjokolade thing a few months back. Of course, it doesn't help that Norwegians as a whole are incredibly stingy when it comes to spending money on food. When you measure expenditure on food as a fraction of disposable income, we're among the people in the world who spend the least, and still people complain about how expensive food is. My pet theory is cultural inertia from the 50s when spending on food was more like half of people's income.

As an aside, Q isn't all that small. They're owned by the Kavli Group, which is massive.

I fear that a lot of the complaints come from people traveling abroad and not taking into account exchange rates etc while shopping.

There was a lovely European price comparison on gasoline done by a Russian news site a few years back. While it was sorted by pump price (putting Norway up top) they also included a calculation of liters pr average wage. If you sorted by that number, all of a sudden the list reversed.

Food is more expensive in Norway because costs (wages) are higher. Your comparison to Sweden is irrelevant without taking that into account. Also please do remember all the young Swedish people who flock to Norway for work because of a much higher salary.

You can also compare meat prices to Denmark, which is much lower than Norway. But then please look at some photos of how pig farming is done in Denmark. Or stats about bacterias in the meat.

I do however agree with you that there are big problems with these semi-monopolies in production and that selection, creativity and quality has suffered from it. Likewise with distribution and retail.

Things must be bad if you go to Sweden to buy cheap alcohol...

When visiting friends in Sweden they always ask us to bring beer (from Denmark).

Norwegians go to Sweden for alcohol, Swedes go to Denmark, Danes go to Germany, Germans go to Italy, and Italians... well, I think they just stay in Italy :)

German food prices (especially; and to some extent alcoholic beverages) are amongst the cheapest in the whole EU. Germans visiting Italy for vacation are of course sourcing good wine and Grappa there.

I recall seeing a photo of Finns either boarding or coming off the ferry between Finland and Estland with trolleys stacked with cheap alcohol (just enough per person to get under the tax quota most likely).

This was over at /r/europe i think, so eventually someone quipped that the same alcohol would make its way to Sweden and Norway, with relevant markups for each hop.

And i wonder if said tasty beef was restaurant served or home cooked...

I know a few Norwegians who have cabins just across the border in Sweden, and they will take an annual road trip to Estonia or Poland or wherever, fill up the car with super-cheap alcohol and take it back to the cabin in Sweden, and then bring the allowed (tiny) quota back to Norway every time they go to the cabin.

I've seen this myself. It is extremely common for some to take the Finland-Estonia ferry just to stock up on alcohol and not even get off the ferry.

And if you live in Denmark, near the border to Germany, you pretty much only buy beer from German shops, right across the border because its way cheaper

The French buy groceries and alcohol from Germany as well.

In Sweden there are dealers selling illegally imported alcohol from Denmark/Germany.

You can legally import alcohol into Sweden, you can't legally sell it.

I think it has to be for "personal use" when you're importing it. It's not for personal use if you intend to sell it, thus it's illegally imported (smuggled). At least that's how it is in Denmark.

Only 3% of Norway is farmable land. This makes it MUCH more difficult and hence expensive to make food in than for example Sweden (or the US). IF you want to produce your own food so that you won't have to starve in case of a crisis, you will have to accept higher food prices and farm subsidies.

What kind of crisis are you expecting that would prevent Norway from importing food from Sweden, the UK, or continental Europe, but would leave domestic food production intact?

> What kind of crisis are you expecting

Unexpected ones.

Norway only has a population density of 39 people per square mile which makes a huge difference. For comparison the UK is at 650 people per square mile. So 3% of Norway ~= 50% of UK in terms of people per square mile of farm land.

The real issue is food production costs are higher becasue of high labor costs, and poor weather / a relatively short growing season.

The ratio of "livable land" is also lower. Crops and humans seem to have that thing in common, not wanting to live at high altitudes or at the bottom of fjords. Though of course livestock don't mind grazing at higher altitudes, in the summer. And maybe having to have smaller farms leads to less efficiency of each "unit" of farmable land?

On the other hand, Japan is pretty mountainous and still has a high population density.

Norway probably didn't have that high population density 1000 years ago, either. But it was enough to cause overpopulation, and in turn motivate the events and practices of the Viking Age.

Beef is tasteless there because it's probably made out of the older milk cows. I'm sorry.

I did my Ph.D. in Norway, and jokingly referred to it as "the land that food forgot."

But I did see some signs of improvement, at least in Oslo.

One of the things I remember best was that the stores were allowed to import butter from Belgia, and it was so much better than the one sold here. When they finally got around to produce enough locally they demanded the shops scrap what they had bought abroad at the shops cost and restock the local brand (Tine).

Even to this day Tine whole milk is not whole milk, it only has 3.5% fat compared to 3.8% in natural whole milk (and which their only competitor has). Guess someone figured it was profitable.

Funny, the ideal in North America is likely Norway's small farms rather than our hormone-laden factory farms.

Competitive pressures are complex; neither of our markets appear ideal.

> One of the things I hate most about living in Norway

Of course this ends up as the top comment. :-)

As a swede I remember this, some entrepreneurial swedes smuggled truckloads of butter over the border and sold through craigslist-esque resale markets for massive profits (we're talking 10-50x the Swedish price). According to Norwegian customs it's illegal to import diary products into Norway, thus rendering the butter smuggling illegal but highly profitable.

Swedish newspapers wrote a lot of articles about this bizarre situation and selling butter to Norwegians became a rather common joke in Sweden during this time and the following year.

In some world views, going around legislation ("smuggling") for financial profit makes you a criminal, not an entrepreneurial, person.

Who says that you can't be an entrepreneurial criminal? I wouldn't see them as contradicting terms.

Nobody, it's just that especially around here "entrepreneurial" carries positive connotations as far as I know, and I just wanted to point out that all kinds of profit-making perhaps aren't equally awesome.

On the other hand, especially around here "regulation" carries negative connotations as far as I know, and pointing out the obvious isn't going to make people suddenly endorse protectionism.

If people are to associate entrepreneurial qualities as positive no matter the underlying activity then that is their prerogative. I don't think the author of that comment should change his choice of words. I suppose the word 'enterprising' might suit your tastes better while still conveying the intelligence of the perpetrators.

what is wrong with smuggling? Especially with the kind of smuggling mentioned here? In that situation it was a very victimless crime and one can see how it was even beneficial to the public.

Smugglers don't pay import tariffs. From the article:

> Shortages persisted as a result of high import tariffs on butter to protect the domestic dairy industry against foreign competition

Import tariffs are the crime, then, not the smuggling.

There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. -Ayn Rand

And in others, passing such legislation for your cronies' financial profit makes you a criminal.

Is that what is happening here? Maybe.

But, there's also a duty for governments to support national and local industries that are important for the country's long-term security.

That's one way of looking at it. Another way is that it constitutes a regressive tax on a life essential - food - for the sole benefit of a politically powerful minority lobby - food processors.

In the country of my birth, until about 50 years ago, the shoe-making industry was considered important - and the producers managed to convince the government that a tarrif on shoes would protect a vital national industry and all the associated jobs. And indeed it did; but the result is plain in photos from the era; most people wore old worn out shoes particularly the poor.

Personally I think to deprive the relatively poor of access to cheap foreign food/clothes/etc. to ensure a tiny segment of the population is "protected" is immoral. But the political power of industrialists in concert with labour unions is formiddable.

Is the production of butter important for Norway's long-term security?

Possibly. At the very least, this story proves that the people do value a stable supply of butter. Norway is not in the EU, so why would they make themselves economically dependent on Sweden for everyday commodities?

this story proves that the people do value a stable supply of butter

Yes. It also proves that the import restrictions threaten that stability.

why would they make themselves economically dependent on Sweden for everyday commodities?

To keep the stable supply that they are unable to maintain on their own, as this story shows. And why would they be dependent on Sweden? Would other countries refuse to export to Norway?

When Goods Don't Cross Borders, Armies Will ;)

> In some world views, going around legislation ("smuggling") for financial profit makes you a criminal, not an entrepreneurial, person.

I read somewhere that the psychological profile of CEO's and criminals are remarkably similar... Growth hacking is also a variation of criminal behavior, and many successful startups use it to their advantage.

Of course

Let's just hope you stick to that when the difference between following legislation and not is risk to your household, hunger or bodily harm.

> According to Norwegian customs it's illegal to import diary products into Norway

How is that allowed, when Norway is a member of the EEA?

AIUI, it's not illegal and there is nothing to pay if you're under the relevant limits and it's for personal use. You can import up to 6000NOK of goods (3000NOK if you've only been out of Norway for < 24 hours) and you can bring up to 10 kg combined of meat/cheese etc from EEA countries. That's quite a lot of butter. In fact, the 2nd link below is ambiguous on the point of whether dairy products other than cheese are included in the 10 kg limit, but you'd probably want to assume so to be safe. Either way, you can import a lot of butter for personal use.

http://www.toll.no/en/international/english/shopping-abroad/...

It's not illegal, but dairy products are generally taxed heavily to allow Norwegian products to compete on price. There may be some special permits required to import, I don't know the specifics.

Growing up in British Columbia in the 90s, it was a pretty common thing in college to cross the border at Blaine (there was a Grocery Store right on the other side of the border, and was one of the few American places that took Canadian currency without blinking), and we always brought back lots of milk and butter.

BC, of course, had fairly strict dairy quotas. So, in a province with abundant farmland, Milk/Butter/Cheese were expensive enough that was worth a trip across the border to stock up.

The Chevron at truck crossing in Blaine still sells butter, huge amounts of it. As an American, it floored me the first time I saw it.

It was actually really bad, as most Christmas cakes require a lot of butter. It felt quite ridiculous that the shops were suddenly rationing butter to a pack per customer in December. You would have thought it was war times. Some friends abroad even gave me butter for Christmas, which was supposed to be a joke but was actually really useful haha.

Yeah I remember this, we just made our own butter. Shared a butter recipe on my facebook wall - instant hero.

They should talk about the 2014-2015 butter crisis in Japan, where the butter completely ran out from the shelves because of stupid local JA (Japan Agriculture Mafia) restrictions imposed on imports and even inland, across-region exchanges of butter. Pure market control madness at work, resulting in people being unable to get their hands on butter for several months.

I have been to Japan twice during this time and, as a tourist, didn't really notice any of this. Is this why seemingly all the butter in Japans restaurants is imported from Australia?

The current butter crises is not as bad as the previous ones. While my local grocery store regularly has a sign saying "butter sold out nationwide" the 7-11 down the street seems to have some and the bakery next door is using a lot of butter in their products.

For many more "weird" articles, see https://en.wikipedia.org/wiki/Wikipedia:Unusual_articles

Well this has probably halved my productivity for the day, my attempts to hide laughter are getting me some funny looks as well. https://en.wikipedia.org/wiki/List_of_animals_with_fraudulen... I like very much

My favorite: https://en.wikipedia.org/wiki/Emu_War

I'm not into computer graphics but the Utah teapot article [0] reminded me why I carry the kettle back into the kitchen by the handle while spinning it around to get a look at it at different angles.

[0] https://en.wikipedia.org/wiki/Utah_teapot

I feel there should a warning attached to that link. If you're the type of person who loses several hours on Wikipedia/TvTropes, you should probably not visit that link if you've got something to do in the next couple of hours (or days).

Damm you, there goes my productivity level for the next few days.

The most funny thing about this butter crisis, is that the producer actually fucked up a batch of 60 tons of butter in August. Sure they were quick to blame external factors, when the truth was that they fucked up.

https://translate.google.com/translate?hl=en&sl=no&tl=en&u=h...

> The dairy industry estimated a deficit of 500 to 1000 tonnes

Sounds like 60 tonnes wouldn't have made much difference.

Japan is currently in the middle of one of these due to a hot summer last year. It is not as bad as the Norwegian one, however it is not the only one in recent memory, either - there was a butter shortage in Japan in (IIRC) 2008 as well.

Frankly, it feels like we've had butter shortage for the past 5 years. It's ridiculous...

Glad you mentioned it - I had a comment about that as well before reading yours. And the butter is crazy expensive in Japan on top of that (just like fruits vegetables and everything else produced locally, I guess...).

Dear Norway. We stand ready to hook you up intravenously. You just say the word.

Sincerely, Denmark. The Lurpak country.

I wouldn't eat Lurpak butter if you paid me. I agree that more competition would be good but not at the expense of destroying the Norwegian policy on agricultural self sufficiency.

Anyway Lurpak is from Arla which occupies the pretty much same sort of position in Denmark as Tine in Norway.

The crisis was not really a great disaster and at the time there really were not a lot of people calling for deregulation.

And as for the complaints about food being expensive, well to some extent this is a national sport just like Brits complaining about the weather, that is, not to be taken seriously. I'm English and have lived here in Norway for 30 years, almost half my life now so I well acquainted with both.

If food were too expensive it would be impossible to sell. Even the cheap supermarkets here carry half a dozen brands of extra virgin olive oil for example; and the variety of bread available here in even the smallest supermarket outstrips most British hypermarkets, etc.

> The crisis was not really a great disaster and at the time there really were not a lot of people calling for deregulation.

Yep, it just fit the opposition party line of EU good, independence bad. And the press jumped on it as a "look how shitty our nation is" story.

Never mind that the previous months had seen the very same press lauding a high fat diet...

In the end it was pretty much a media created tempest in a teapot.

I didn't follow the mainstream press at the time and didn't even notice it happening. Had no butter problems at all. I only noticed it after the fact, because relatives talked about it.

Except Denmark refused to export since it wasn't worth setting up the trade routes just for a single season of export. Source: this comic http://satwcomic.com/too-little-butter

Colbert did a nice report on it - http://videosift.com/video/Colbert-on-the-Norwegian-Butter-S...

I haven't watched that in a long time. Was the laugh track always so obvious?

Sentence. Ha ha guffaw ha ha! Sentence. Ha ha guffaw ha ha! Sentence. Ha ha guffaw ha ha! Sentence. Ha ha guffaw ha ha!

It's like trying to watch the Mary Tyler Moore show:

https://www.youtube.com/watch?v=ihLJrcS8lsg

It's filmed with an audience (which Colbert regularly speaks directly to). I don't think it's a laugh track.

I swear they have a "laugh" sign behind the camera that said "audience" has been trained to follow.

That's just a typical US TV audience, the crowd freaks out at the slightest thing. The people who make the shows are probably grateful for the padding, but it's grating for viewers who aren't used to it.

Dunno if it is only US. I swear i have noticed this with British shows as well.

Funny report actually ...

Did the price of cream also skyrocket? Would it have been cheaper to make your own butter?

Cream was more available than butter. I guess most people would rather drive to Sweden than whip cream.

However, cream was also in high demand for Christmas, so I suspect that it couldn't offset much of the demand for butter anyway.

Interesting question, don't know why this was downvoted. Making butter is really easy using a stirrer.

Since it was a milk shortage, I think it's reasonable to assume that cream was also rarer, though I suppose it might not have been subject to the same import restrictions.

Not as I recall, we made our own butter during the "crisis". At least kt was possible to get (full?) cream

I'm pretty sure the phrase "butter crisis" was invented by the tabloids. I would use "shortage", from how I experienced it -- but that doesn't produce nearly as good "first world problems" satires I suppose.

It may be some 30 years old, but it still describes Norwegian media perfectly:

https://www.youtube.com/watch?v=iwegca0MhfQ

Takes me back to the heady days of the 1970s UK sugar crisis

http://www.theguardian.com/theguardian/2010/jul/09/archive-r...

It's when a lot of people stopped having sugar in their tea. Probably improved UK health and dental health no end.

When a government has to chose between a strong political constituency or the people having access to food, be it a rich or poor society, the choice is hard.

I was in Norway twice during the crisis and my preferred brand was available in the first shop I went to, both times. But my preferred brand is expensive organic butter ("rørossmør", FWIW).

Maybe I just happened to visit the shop on the right two days. Or maybe the crisis wasn't severe enough to make people buy the more expensive alternative.

Or some just didn't bother to insist on using butter.

First i heard of this "crisis" was when i walked past the TV...

Tommy did a nice report on this, from the trenches - https://www.youtube.com/watch?v=ub0GzU56YMA

Even though Norway is not part of the EU, it is quite dependent on it for all sorts of reasons. This is an example where the Norwegian government tried to stop that through high import tariffs on butter, and it backfired.

Because of its small population and northern location, it essentially has to import much of its agricultural products from the EU, and thereby accept most of the EU regulations and academic degrees without having the slightest say in the matter.

Some people blamed it on the "Lavkarbo"-diet (low card, high fat) that was trending in Norway at the time. https://www.google.com/trends/explore#q=lavkarbo

They should just switch to Crisco, and other trans-fats like the U.S. ... I'm joking really, as an American the concept of a butter shortage is interesting considering most of this market uses heavily refined, flavored, perfumed vegetable oils.

I switched to only using animal or cold-pressed fats a couple years ago... It's helped some aspects of my health a lot... though I still crave starchy carbs...

You're thinking about margarine?

https://en.wikipedia.org/wiki/Margarine

Yeah, most "made do" with that. It was just a combo of diet fad, holiday "traditions", and media looking for anything "controversial" to talk about...

Cows, grazing ... do they export some of it? The milk from grain fed animals is bland.

It is not uncommon in Europe for cows to feed mainly on grass. We don't have the corn lobby (we have other ones instead).

I don't know about the 'mainly' part. North of the Alps, the grass only grows in the summer, south of the Alps, it only grows in spring and fall. If their cows fed only or mainly on grass, dairy pastures could only support small herds, and dairy would be a very expensive luxury item.

They usually harvest and conserve grass for use in the seasons when it doesn't grow.

http://upload.wikimedia.org/wikipedia/commons/d/d2/Hay_bales...

As one overly creative tourist guide supposedly put it, marshmallows for trolls.

We usually call them tractor eggs.

I've never heard that nickname before today.

Kerrygold is a huge Irish export of grassfed butter which can be found in Costco.

Not having much land to cultivate grain has some upsides.

>As a result of the butter crisis, Norwegian retailers lost an estimated NOK 43m.

That's practically a rounding error. That's 21 suburban houses.

A stark reminder of how zombified the nation has gotten when a diet fad and a holiday ritual is able to cause such a ruckus...

This was the same year that Utøya happened. You can't be in super-serious mode all the time.

Based on this thread, you take the labelling of this shortage much more seriously than anyone ever took the shortage itself.

Because contextual jokes translates poorly online.

Lets not hand Fox News headlines on a platter...

At the same time the EU (Norway stayed out of that party) was distributing its surplus butter mountains to the poor.

I believe Jean-Baptiste Douemeng, a French communist, made millions exporting subsidized surpluses, including butter, to communist countries in the 40s-50s: http://en.wikipedia.org/wiki/Jean-Baptiste_Doumeng

So was he an "enterprising communist", "entrepreneurial communist", or "criminal communist"?

I'm searching for a video of The Daily Show about this butter crisis. Who knows where is it?

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