Orkla expands its dominance at the grocery store

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Orkla AS, one of Norway’s biggest industrial firms, is about to get even more powerful in the grocery store business after finally succeeding with a long-sought acquisition of the venerable family-controlled firm Rieber & Søn of Bergen. The deal immediately set off concerns of reduced competition and higher prices for consumers.

Rieber is behind such brand names in Norway as Toro soups, Denja herring and sandwich spreads, Mr Lee noodles, Vossafår cold cuts and Vestlandslefsa, a pastry-like snack. It has around 2,900 employees, 1,200 of them in Norway.

Orkla, which has moved from traditional industry like mining and forestry to household products, is now perhaps best known for its Pizza Grandiosa and had been trying to buy Rieber for years. Firms controlled by the Bergen-based Rieber family firm rebuffed Orkla’s approaches until this summer, when Norwegian Broadcasting (NRK) reported that Orkla’s new chief executive Åge Korsvold succeeded in making an offer they couldn’t refuse.

Orkla is paying just over NOK 6 billion (USD 1 billion) to take over 90 percent of Rieber, with the Rieber family agreeing to sell out. The sale is subject to various regulatory approvals and isn’t expected to be completed until next year.

Some grocery store owners worried that Orkla as a supplier of grocery items will become even more powerful in controlling shelf space. An Orkla official simply said that “now we’re on our way to becoming a big brand-name company.”

Views and News staff