A marketing professor said Rema 1000's move could backfire because "there is a lot of identity in beer". Photo: Iris
The supermarket announced on Sunday that it would focus more on local microbrews in its stores, much to the chagrin of the Tromsø brewery Mack, which said its sales would be so impacted by the move that it would likely have to lay off employees.
The duelling announcements from the two companies have set up a battle over whether Rema 1000 or Mack beer is the stronger brand among consumers in the north, according to Lars Erling Olsen, a marketing professor at Oslo College.
Olsen said Rema’s move is understandable, given the supermarket’s new three-year ‘best friend deal’ with Danish brewing giant Carlsberg.
“It's an attempt to get fewer suppliers and a larger-scale operation and thus save costs,” he said, adding that Rema 1000 faces the pressures of a tough retail market.
But Rema’s deal with Carlsberg and its accompanying decision to give more shelf space to microbreweries isn’t expected to just hurt Mack, which markets itself as the world’s most northern brewery.
Local breweries including Bergen-based Hansa and Kristiansand’s CB will also be hard, if not impossible, to find in Rema 1000 stores up north. And Olsen said the move might backfire.
“The reality is that customers are going to get fewer options. That’s where Rema’s market power will come into play. Will people accept it or not? If Mack has sufficient market strength, people will stop shopping at Rema 1000,” he said.
The marketing professor added that for many customers, the choice of beer on the shelves could absolutely determine which supermarket they’ll choose.
“There is a lot of identity in beer,” Olsen said.
Norway's consumer rights watchdog, Forbrukerrådet, said it didn’t say anything wrong with Rema 1000’s strategy of teaming up with Carlsberg and using the remainder of its shelf space for microbrews.
“We want to see good competition in the grocery market; it’s good for the consumer. And we understand why Rema 1000, as the market’s smallest player, wants to take steps to strengthen its position,” the council’s trade director, Gunstein Instefjord, said.
Instefjord added that at the end of the day it is a good thing if supermarkets distinguish themselves from one another.
“It is we the consumers who decide, and if the store doesn’t have what we want, we’ll go to another store. It remains to be seen whether Rema will appeal to consumers,” he said.