Required Report - public distribution

**Date:** 11/30/2006

**GAIN Report Number:** NO6008

NO0000

**Norway**

**Retail Food Sector**

**Report**

**2006**

**Approved by:**

![](media/image1.wmf)Roger Wentzel

U.S. Embassy

**Prepared by:**

Bettina Dahlbacka

**Report Highlights:**

The food retail sector in Norway is largely integrated and a few major
import/wholesale groups cover about 90% of the market. A new player
entered the Norwegian food retail market in 2004 when the German
discounter Lidl opened their first stores. Retailers are responding to
the competition by opening new discount stores and developing their own
low-priced private label. Also, there is a strong Nordic concentration
as pan-Nordic mergers and cooperative agreements seek to achieve greater
efficiencies and economies of scale to fend off other European
competitors.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Stockholm \[SW1\]

\[NO\]

# Section I. Market Summary

-   Total grocery retail market turnover in Norway in 2005 reached US\$
    125 billion.

-   Sales growth in 2005 was 3 percent compared to 5.2 percent in 2003.

-   In 2004, total imports of agricultural, fish & forestry products by
    Norway reached US\$ 4.3 billion of which consumer-oriented
    high-value products was US\$ 1.9 billion.

-   The U.S. share of Norway's agricultural, fish & forestry imports in
    2004 amounted to US\$ 159 million, about 4 percent of Norway's total
    agricultural imports.

-   83 percent of retail food products are sold through grocery retail
    chains, 13 percent in gas stations and kiosks, and 4 percent by
    specialty stores.

-   In 2005, grocery products were sold via 4,688 grocery stores and
    approximately 3,000 gas stations and kiosks.

-   Four retail chains (Norgesgruppen, Coop Norge, Reitan Gruppen and
    ICA Norge) control about 90% of all retail food stores and also
    dominate grocery sales through gas stations and kiosks.

-   Norway's retail sector reflects considerable excess capacity.
    Domestic store capacity and infrastructure can service as many as 7
    to 8 million people, while the Norwegian population is only 4.6
    million.

-   Norway's four dominant retail chains are involved in the grocery
    trade in other Nordic countries as well. In order to strengthen
    their competitiveness in the region, Norwegian retailers have
    established relationships with other Nordic chains through mergers
    or cooperative agreements.

-   In September 2004, the German retail chain Lidl entered the
    Norwegian market. Lidl had 46 stores in Norway in 2005.

-   Private labeling accounts for about 11 percent of Norway's total
    grocery market.

-   Swedish-Norwegian cross border trade reached a new high of NOK 9
    billion (US\$ 1.4 billion) in 2005.

## Advantages/Challenges

+-----------------------------------+-----------------------------------+
| # Advantages                      | # Challenges                      |
+-----------------------------------+-----------------------------------+
| The United States is a preferred  | Norway's regulations and          |
| supplier to Norway for products   | attitudes regarding products of   |
| such as tree nuts and dried       | biotechnology are prohibitive.    |
| fruits, both as branded products  |                                   |
| and for private label.            |                                   |
+-----------------------------------+-----------------------------------+
| U.S. products have a reputation   | A lack of promotion and marketing |
| for high quality. The current     | activities in Norway by U.S.      |
| favorable exchange rate enhances  | suppliers limits potential sales. |
| sales opportunities.              |                                   |
+-----------------------------------+-----------------------------------+
| The United States is associated   | Strong competition exists from    |
| with new-to-market products.      | European suppliers who benefit    |
|                                   | from preferential customs duties. |
+-----------------------------------+-----------------------------------+
| Recent mergers within the Nordic  | European discount stores (LIDL)   |
| chains should bring higher sales  | have entered the Norwegian market |
| volumes to U.S. suppliers that    | with private brands.              |
| are already established in this   |                                   |
| market.                           |                                   |
+-----------------------------------+-----------------------------------+
| Products that previously enjoyed  | Domestically produced food        |
| access to only one of the Nordic  | products are highly protected     |
| markets, or had only small market | through tariff and non-tariff     |
| share, could potentially increase | barriers.                         |
| market exposure throughout all    |                                   |
| Nordic countries via the new      |                                   |
| region-wide chain agreements.     |                                   |
+-----------------------------------+-----------------------------------+

## 

# Section II. Road Map for Market Entry

## A. Grocery Stores (supermarkets, small supermarkets and discount stores)

### Entry Strategy

The Norwegian retail market is totally dominated by four retail chains
\-- Norgesgruppen A/S, Coop Norge, Reitan Gruppen and ICA Norge A/S.
Combined, they control about 90 percent of the retail market. All of
these chains either own or are owned by a wholesaler, both for grocery
products as well as fruits and vegetables. Breaking into sales to these
companies can be difficult for small and medium-sized companies without
local representation.

All of the above chains require that imported products be delivered to
their stores with the same facility and reliability that domestic
suppliers provide. New-to-market exporters need an importer, wholesaler
or agent to assist them with product clearances. Also, they must be
ready to provide extensive marketing support to their importer.

New-to-market exporters should:

-   Conduct early market research to assess product potential and
    existing competition.

-   Find an agent, importer, wholesaler or domestic industry partner to
    assist with information on import duties, phytosanitary regulations,
    labeling requirements and competition.

-   Personally visit Norway. This is not only advisable but necessary in
    order to build relationships with potential customers.

-   Discuss market strategies and deliver capacity with your importer.
    Reliability of supply is crucial in this market.

### General Import and Inspection Procedures

Beginning January 1, 1999, Norway adopted the rules and regulations of
the EU in addition to its own domestic requirements related to the
import of animal food products.

Imported animal products for food use must come from an EU-approved
plant and be accompanied by the necessary certificates.

On January 1, 2005, Norway introduced the European notification system
for transport of animal products and live animals, TRACES (TRAde Control
and Expert System). Imports of animal products from third countries must
be notified- by the importer- through the TRACES system. All other food
imports (from third countries) such as vegetable feed, barley, potatoes
and other non-animal food should be notified -- by the importer --
through the specific Norwegian Matilda VAM-system. Matilda VAM shall
only be used for non-animal products. TRACES is used only for live
animals and animal products.

From January 1, 2006, the Common Veterinary Entry Document (CVED)
functions as advance notice for the import of animal products from third
countries. No other specific import application or declaration is
needed. However, Norway requires the importer to be registered and thus
approved. The importer is responsible for filling out the CVED. The CVED
can be filled out electronically in TRACES and then sent to the one of
the Border Inspection Posts of the Norwegian Food Safety Authority,
Mattilsynet, for approval.

### Market Structure

Compared to other Nordic countries, the discount sector has a very high
presence in Norway and accounts for approximately 50 percent of the food
retail market, mostly due to high domestic food prices. Growth figures
in the discount sector show no sign of leveling off. This has stirred
interest among foreign players to enter the domestically dominated
Nordic food retail market.

In 2004, the German discount chain Lidl entered the Norwegian market by
simultaneously opening 10 stores. However, Lidl has had difficulties
expanding as rapidly in Norway as it did in the EU countries. A year and
a half after launch, Lidl has 46 outlets and only 1% market share in
Norway. Norway still heavily protects domestic production with high
import tariffs and other barriers to trade. In order to boost sales,
Lidl recently signed agreement with several Norwegian suppliers for
well-known Norwegian brands. Private labels account for 85 percent of
Lidl's food line.

Norwegian retailers are responding to the competition from Lidl by
opening new discount stores and developing their own low-priced private
label. Also, the retailers are continually working to make their chains
operate more effectively.

Swedish-Norwegian cross border trade is increasing and was approximately
SEK 9 billion (US\$ 1.4 billion) in 2005. Norwegians are increasing
their purchases of much cheaper Swedish food products at supermarkets on
the Swedish side of the Norway-Sweden border. Average food prices in
Sweden are 26 percent cheaper than in Norway.

### Distribution Systems ‑ Consumer-Ready Food Products

In 2005, there were 4,150 grocery stores in Norway with turnover of NOK
125 billion (US\$ 20 billion). Grocery stores account for 83 percent of
retail food sales including fresh, frozen, and canned goods as well as
non‑alcoholic beverages and non‑food items. Kiosks and gas marts account
for 13 percent and specialty stores such as bakeries, meat and candy
shops account for the remaining 4 percent. In 2005, about 54 percent of
Norwegian food distribution to retailers was handled by the following
five large wholesale enterprises:

# Major Distribution Companies/Chains 

+-----------------------+-----------------------+-----------------------+
| **Company/Chain**     | **Address**           | **Phone/Fax**         |
+-----------------------+-----------------------+-----------------------+
| Asko Dagligvare       | Parkveien 61,         | Phone: (47) 24 11 31  |
|                       | Postboks 2775 Solli,  | 00                    |
| (NorgesGruppen)       | NO-0204 OSLO          |                       |
|                       |                       | Fax: (47) 24 11 31 01 |
+-----------------------+-----------------------+-----------------------+
| ICA Distribusjon      | Sinsenveien 45,       | Phone: (47) 23 05     |
|                       | Postboks 6500         | 5000                  |
| (ICA Norge A/S)       | Rodelokka,            |                       |
|                       |                       | Fax: (47) 23 05 5001  |
|                       | N-0501 Oslo           |                       |
+-----------------------+-----------------------+-----------------------+
| Coop Norge            | Ostre Aker vei 264    | Phone: (47) 22 89     |
| Distribusjon          |                       | 9595                  |
|                       | P. O.Box 21 Grorud    |                       |
| (Coop Norge)          |                       | Fax: (47) 22 89 9745  |
|                       | N-0915 Oslo           |                       |
+-----------------------+-----------------------+-----------------------+
| REMA 1000 Norge A/S\  | Grenseveien 88\       | Phone: (47) 24 09 85  |
| (Reitan Gruppen)      | Postboks 6428         | 00                    |
|                       | Etterstad\            |                       |
|                       | N-0605 Oslo           | Fax: (47) 24 09 85 49 |
+-----------------------+-----------------------+-----------------------+
| Engrospartner A/S     | Leiraveien 11\        | Phone: (47) 66 93 67  |
|                       | Postboks 163\         | 00                    |
| (Reitan Gruppen)      | N-2001 Lillestrøm     |                       |
|                       |                       | Fax: (47) 66 93 67 01 |
+-----------------------+-----------------------+-----------------------+

### Norwegian Grocery Retail Chains and Market Share

The Norwegian retail grocery sector has undergone years of restructuring
during which smaller chains have changed partners several times. The
remaining chains, except for the largest group, Norgesgruppen AS,
control the distribution of products from producers to consumers.
Norgesgruppen AS is more of a buying group, with marketing handled
individually by the different smaller chains it supplies. Supermarkets,
small supermarkets and discount stores make up about one third each of
the total number of stores. Listed below are market shares and number of
stores at the beginning of 2005.

# Major Food Retailers

+-----------------+---------------------+-------------+---------------+
| **Chain**       | **Phone and Fax**   | Number of   | ######        |
|                 |                     | Stores      |  Market Share |
|                 |                     |             |               |
|                 |                     |             | **(%)**       |
+-----------------+---------------------+-------------+---------------+
| Norgesgruppen   | Phone:(47) 24 11    | 2,790       | 32.7          |
| AS              | 3100                |             |               |
|                 |                     |             |               |
| Parkveien 61    | Fax: (47) 24 11     |             |               |
|                 | 3101                |             |               |
| P.O.Box 2775    |                     |             |               |
| Solli           |                     |             |               |
|                 |                     |             |               |
| N-1007 Oslo     |                     |             |               |
+-----------------+---------------------+-------------+---------------+
| Coop Norge A    | Phone:(47) 22 89    | 886         | 20.3          |
|                 | 9595                |             |               |
| Østre Aker vei  |                     |             |               |
| 264             | Fax :(47) 22 89     |             |               |
|                 | 9745                |             |               |
| P.O.Box 21      |                     |             |               |
| Grorud          |                     |             |               |
|                 |                     |             |               |
| N-0915 Oslo     |                     |             |               |
+-----------------+---------------------+-------------+---------------+
| Reitan Gruppen  | Phone:(47) 73 89    | 942         | 17.0          |
|                 | 1000                |             |               |
| Lade Gaard      |                     |             |               |
|                 | Fax :(47) 73 89     |             |               |
| Postboks 1840   | 1089                |             |               |
|                 |                     |             |               |
| N-7440          |                     |             |               |
| Trondheim       |                     |             |               |
+-----------------+---------------------+-------------+---------------+
| ICA Norge A/S   | Phone:(47) 23 05    | 894         | 16.5          |
|                 | 5000                |             |               |
| Sinsenveien 45  |                     |             |               |
|                 | Fax: (47) 23 05     |             |               |
| P.O.Box 6500    | 5001                |             |               |
| Rodelökka       |                     |             |               |
|                 |                     |             |               |
| N-0501 Oslo     |                     |             |               |
+-----------------+---------------------+-------------+---------------+
| Others          |                     | 4,688       | 13.5          |
+-----------------+---------------------+-------------+---------------+
| Total           |                     | 10,200      | 100.0         |
+-----------------+---------------------+-------------+---------------+

## B. Gas Marts and Convenience Kiosks

### Entry Strategy

New-to-market exporters should bear in mind that while there is a close
connection between the larger grocery wholesalers and retail chains and
the gas marts and kiosks, the gas marts and kiosks have their own
organizations for buying and marketing. Close and personal contact with
an importer and/or with buyers in these organizations is necessary in
this sector, as well as for the larger chains, to achieve a good result.
Main players include the largest gas stations (Statoil, Shell, Esso and
Hydro/Texaco) and kiosks (Gyda butikkene and Deli de Luca). These stores
specialize in basic grocery products and their consumers are not as
price sensitive. Therefore, there is greater receptivity to convenience
foods and impulse-buy products.

Advice to new-to-market exporters:

-   Meet with the major grocery retailers as they are the major
    suppliers in this sector.

-   Calculate what your price would be in this market, including
    freight, duties and logistics.

-   Have a clear idea of competition in your product category.

### Company profiles

Gas marts make up 57 percent and kiosks 38 percent of a combined US\$
3.4 billion turnover of grocery products at these two types of outlets.
However, turnover in gas marts and kiosks has stagnated in the past two
years as grocery stores have extended their evening and weekend opening
hours.

### GAS Marts

+-------------------+--------------------+-----------+---------------+
| **Gas Chains**    | **Phone and Fax**  | **Number  | **Market      |
|                   |                    | of        | Share (%)**   |
|                   |                    | Outlets** |               |
+-------------------+--------------------+-----------+---------------+
| Statoil           | Phone:(47)22 96    | 418       | 33            |
| Detaljhandel      | 2500               |           |               |
| Sörkedalsveien 8  |                    |           |               |
|                   | Fax: (47)22 96     |           |               |
| P.O.Box 1176      | 2970               |           |               |
| Sentrum           |                    |           |               |
|                   |                    |           |               |
| N-0107 Oslo (1)   |                    |           |               |
+-------------------+--------------------+-----------+---------------+
| Norske Shell      | Phone:(47)22 66    | 434       | 28            |
|                   | 5000               |           |               |
| P.O.Box 1154      |                    |           |               |
| Sentrum           | Fax: (47)22 66     |           |               |
|                   | 5148               |           |               |
| N-0107 Oslo (2)   |                    |           |               |
+-------------------+--------------------+-----------+---------------+
| Esso Norge AS     | Phone:(47)22 66    | 326       | 21            |
|                   | 3030               |           |               |
| Drammensveien 149 |                    |           |               |
|                   | Fax: (47) 22 66    |           |               |
| P.O.Box 350       | 3777               |           |               |
| Sköyen            |                    |           |               |
|                   |                    |           |               |
| N-0213 Oslo (2)   |                    |           |               |
+-------------------+--------------------+-----------+---------------+
| YX Engergi        | Phone:(47)22 12    | 292       | 18            |
|                   | 4000               |           |               |
| Drammensveien 134 |                    |           |               |
|                   | Fax: (47)22 12     |           |               |
| N-0213 Oslo (3)   | 4050               |           |               |
+-------------------+--------------------+-----------+---------------+

\(1\) Main supplier ICA

\(2\) Main supplier Asko/Norgesgruppen

\(3\) Reitan Servicehandel

### Kiosks (convenience stores)

+----------------+------------------+---------------+----------------+
| **Kiosk        | **Phone and      | Number of     | #####          |
| chains**       | fax**            | Stores        | # Market Share |
|                |                  |               |                |
|                |                  |               | (%)            |
+----------------+------------------+---------------+----------------+
| Mix Butikkene  | Ph: (47) 24 11   | 857           | 36             |
| A/S            | 3500             |               |                |
|                |                  |               |                |
| Parkveien 60   | Fax:(47) 24 11   |               |                |
| Postbox 2606   | 3101             |               |                |
| Solli, 0203    |                  |               |                |
| Oslo           |                  |               |                |
+----------------+------------------+---------------+----------------+
| Narvesen Norge | Ph: (47) 81 50   | 453           | 36             |
|                | 0909             |               |                |
| Bertrand       |                  |               |                |
| Narvesensvei2  | Fax:(47) 22 57   |               |                |
|                | 30 58            |               |                |
| P.O.Box 6219   |                  |               |                |
| Etterstad      |                  |               |                |
|                |                  |               |                |
| N-0603 Oslo    |                  |               |                |
+----------------+------------------+---------------+----------------+
| Gyda Butikkene | Ph: (47) 22 02   | 180           | 6              |
| BA             | 6460             |               |                |
|                |                  |               |                |
| P.O.Box 153    | Fax:(47) 22 02   |               |                |
| Kjelsås        | 6470             |               |                |
|                |                  |               |                |
| N-0411 Oslo    |                  |               |                |
+----------------+------------------+---------------+----------------+
| Small Shops    | Ph: (47) 22 71   | 78            | 13             |
| Norge          | 1122             |               |                |
|                |                  |               |                |
| Vitaminveien   | Fax:(47) 22 71   |               |                |
| 11A            | 1970             |               |                |
|                |                  |               |                |
| P.O.Box 11     |                  |               |                |
| Grefsen        |                  |               |                |
|                |                  |               |                |
| N-0409 Oslo    |                  |               |                |
+----------------+------------------+---------------+----------------+
| Others         |                  |               | 9              |
+----------------+------------------+---------------+----------------+

## 

# Section III. Competition

## Market Trends

When seafood is excluded, Norway is a net importer of agricultural
products. In 2004, imports (excluding seafood) totaled US\$ 3.87 billion
and exports were valued at roughly US \$900 million. About half of
Norway\'s food and agricultural product sector imports are
consumer‑oriented high-value products. Most of these come under the
horticultural and tropical products group. Major imports are fresh
fruits (oranges, bananas, apples and grapes), dry edible nuts, fruit and
vegetable juices, fresh vegetables, snacks, chocolate and chocolate
products, wines, pet food, live plants, cut flowers and foliage.

The U.S. share of Norway\'s 2004 agricultural product imports was 4
percent (US\$ 159 million). The bulk of U.S. exports to Norway included
cereals, leaf tobacco, processed fruit and vegetables, fresh fruits,
fruit and vegetable juices, nuts, rice, wine and beer.

# Section IV. Best Product Prospects

The best prospects within Norway's retail food sector are products not
produced domestically or those containing ingredients not produced in
Norway. High tariffs and considerable documentation and controls present
obstacles to market entry.

A. The best market prospects in Norway include rice, tropical fruits
(both fresh and canned), fresh vegetables, and a full range of
consumer‑oriented high-value products such as snack foods, processed
fruit and vegetables, fruit and vegetable juices, tree nuts, pet foods,
wine and beer. The U.S. market share is largest in the dried fruit and
nut sector, where the U.S. has captured about 70 percent of imports.
Raisins and prunes dominate dried fruit imports from the U.S. and
almonds, peanuts and walnuts dominate the nut import sector. Sales of
U.S. rice have also been strong, with an achieved market share of about
10 percent. In the category of processed vegetables, U.S. canned corn is
the most popular, with a market share of more than 60 percent.

B. Too little attention has been paid to the Norwegian fresh fruit and
vegetable market in the past few years. The U.S. has lost market share,
primarily due to insufficient marketing and lack of market presence.
Shipping terms and the lack of personal contact between U.S. exporters
and their Norwegian customers are principal reasons given by Norwegian
importers as to why U.S. export business in this category has declined.

C. A number of products face high tariff barriers in the Norwegian
market. This is particularly true of products containing meat, fruit,
vegetables and dairy products that compete directly with domestically
produced Norwegian products. In addition, Norway has implemented a ban
on hormone-treated meat. Norwegian regulations and attitudes concerning
bio-engineered products and product ingredients are prohibitive. Should
the market open, Norway will require import approval by the authorities
noted below as well as labeling of such products.

# Section V. Further Information and Post Contact

Norwegian Food Safety Authority (Mattilsynet)

Ullevålsveien 76, Oslo

P.O. Box 383

N-2381 Brumunddal

Email: <postmottak@mattilsynet.no>

www.mattilsynet.no

Phone: +47 23 21 6800

Fax: +47 23 21 68 01

The above state agency is responsible for product approval, labeling,
additives, and administration of food safety regulations for imported
and domestic products.

Statens Landbruksforvaltning (Norwegian Agricultural Authority)

Dep. Trade and Industry

P.O.Box 8140 Dep.

N-0033 Oslo

E-mail: <postmottak@slf.dep.no>

Phone: +47 24 13 10 00

Fax: +47 24 13 10 05

The above state agency handles customs duties for industrially processed
agricultural products based on product ingredients reported by the
importer. It also handles administrative functions related to
import/supply needs of the country, as well as the auction of quotas
under the WTO agreement. In dealing with this agency, a local Norwegian
agent or importer would be the best means of contact.

**Federation of Norwegian Commercial Agents (Norske Agenters
Landsforening**)

Drammensveien 30

N-0230 Oslo

Norway

Phone: +47 22 44 68 33

Fax: +47 22 44 94 35

This association issues a monthly publication in which proposals from
foreign firms seeking agents/distributors in Norway are published.

# Statistic Norway

Kongens gate 6

N-0033 Oslo

Norway

Phone: +47 21 09 00 00

Fax: +47 21 09 49 73

Web: [www.ssb.no](http://www.ssb.no/)

This agency produces a wide variety of statistical information on
imports.

**Norwegian Customs and Excise**

P.O.Box 8122 Dep.

N-0032 Oslo

Phone: +47 22 86 03 00

Email: [tad@toll.no]{.underline}

Web: [www.toll.no]{.underline}

For further information, please contact:

Foreign Agricultural Service

American Embassy

Dag Hammarskjolds Vag 31

S-115 89 STOCKHOLM, Sweden

Tel: (46-8) 783 5390

Fax: (46-8) 662 8495

Email: agstockholm@usda.gov