Norway: An on-going price war on beer may lead to lay-offs and reductions at Norwegian breweries, The Norway Post reported on April 19. Employees fear for their jobs and the industry say the situation is dramatic. Information director Aina Lemoen-Lunde of the Brewery Industry says the situation now is dramatic for the breweries. She says to NRK TV News that she fears that in the years ahead, Norwegian breweries will experience lay-offs.

The result of the price war is that on April 15 major Norwergian food chains started to sell bottled beer at virtually half price from just a few months ago, at NOK 6.50 (US$0.94) a 0.33-litre bottle. For many of them, this probably means selling with little or no profit, even at a loss for some stores. The low-price beer now has captured up to a third of the market, NRK reports. Retailers in Norway have said that they are prepared to cut prices even more in future to attract more customers. Before Easter, the price of a 0.33-litre bottle was NOK9.0.

The Department for Health and Social Affairs is now considering whether or not the price war may be contravening the legislation covering the sale and distribution of alcoholic beverages.

The press reports suggest the move has been sparked by the expected arrival of German discount retailer Lidl into the Norwegian market later this year. Lidl is known for its strategy of attracting customers with low-priced beer.

The country’s brewing trade is concerned, however, that the price war could threaten jobs at smaller breweries in Norway.

21 April, 2004