Butter crisis exposes 'Soviet conditions'

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Photo: Oslo School of Management
16:00 CET+01:00
Norway’s butter crisis has prompted severe criticism of the country's dairy system, as consumers grapple with shortages that an Oslo management school dean has likened to conditions in the Soviet Union.

Trond Blindheim, dean of the Oslo School of Management, made his comments after 40 percent of respondents in a Sentio survey published by newspaper Nationen said they had formed a more negative view of dairy giant Tine in the wake of the butter shortages.

The butter shortfall had been avoidable, Blindheim said, adding that Tine’s failure to avert the situation could eventually lead to its downfall.

“The system we have today, in which Tine more or less has a monopoly on dairy products, is the kind of system they had in the 1920s.”
Referring to what he described as the “Soviet conditions” that have prevailed this autumn, with butter absent from supermarket shelves, Blindheim said voices calling for free market reform in the dairy sector were gradually succeeding in getting their message across.

“A lot of people would probably say that Tine is living on borrowed time. The way things are now, the situation benefits producers but not consumers,” he told Nationen.

Tine spokesman Øystein Knoph said the company understood that consumers felt let down by the company.

“The dip in confidence is deserved, and we’re not surprised people are disappointed and irritated.

“The butter shortage is regrettable and should have been avoided. We are critical of our own failure to fully foresee the combined effect of reduced milk supply and a major increase in demand for butter,” said Knoph.

Tine could at least take some comfort from the fact that eight out of ten people surveyed by Sentio said they had not felt personally affected by the butter shortfall.

The lack of butter in Norway has been attributed to a mixture of rising demand amid a high-fat diet fad, and a drop in the supply of raw milk after a wet summer led to lower feed production.

Prohibitively high tariffs on the import of butter have also made foreign dairies disinclined to enter the Norwegian market.

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