Consumers punish dairy ‘regulator’
August 31, 2012
Norwegian consumers clearly haven’t forgotten last winter’s nationwide butter shortage, blamed on dairy cooperative Tine’s failure to head it off. Now Tine, also known as the “market regulator” for dairy products in Norway, has lost consumer confidence, reported poorer financial results and must once again import French butter.
An annual ranking of Norway’s best-liked companies, conducted by analysis firm Ipsos MMI (formerly Synovate), shows that Tine has tumbled from fourth place last year to 14th place this year. It once ranked as among the companies that was most-liked, but hasn’t even made it into the Top 10 of the new survey. Now, reports newspaper Aftenposten, the Swedish home furnishings giant Ikea holds the top spot, followed by grocery story chain Coop Norge and Norwegian Broadcasting (NRK).
Even though Tine continues to wield enormous power, controlling 80 percent of the dairy products market in Norway, it must still care about its reputation, marketing professr Tor W Andreassen at Norwegian Business School BI told Aftenposten. “Because of its monopoly, Tine doesn’t fear losing customers but rather disappointing the authorities,” Andreasen said. “When its reputation falls and consumers complain, the politicians must react. That can lead to changes in Tine’s mandate and they’re afraid of that.”
Tine continues to have trouble meeting demand for butter and, most recently, various brands of yoghurt. It’s been ridiculed in the media, chided by dairy farmers who claim it hasn’t raised production quotas quickly enough and appeared to behave arrogantly when the butter shortages first began. Now Tine officials claim they’re working hard to win back consumer confidence.
The fall in the Ipsos MMI rankings was, admitted Tine’s communications director, “a well-deserved smack” from consumers. “We aren’t surprised that Norwegian consumers are disappointed over the butter shortage last year,” Lars Galtung of Tine told Aftenposten. Now he says Tine not only has arranged for butter imports to offset another looming shortage, but he claims Tine has struck an agreement with a French importer to make butter according to Tine’s own recipe. “It will be better-suited to Norwegian taste and usage,” he said.
Financial results, meanwhile, have been hit by the costs of investment in new facilities in addition to lower sales. Even sales of its Diplom ice cream declined this summer, which was cold and rainy. “Good ice creams sales are tied to good weather,” Galtung said.
Tine’s absentee chief executive Hanne Refsholt, who’s been off on a controversial year of fully paid study leave and therefore wasn’t at work when last winter’s butter crisis hit, was expected to be back next week.
Views and News from Norway/Nina Berglund
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