Oslo’s main airport at Gardermoen (OSL) offers a variety of spots to have a beer or buy some food or snacks, but the prices are the same at them all. The head of Norway’s competition authority has received consumer complaints, and is keen to end the airport’s practice of granting retail rights for all cafés and shops to just one operator.
“Competition is important and good, also when you’re standing in the departure hall,” Christine B Meyer, director of Norway’s competition authority, told newspaper Dagens Næringsliv (DN) this week. She’s not happy that the state agency in charge of Norwegian airports, Avinor, has granted one single major retail operator, SSP (billed as The Food Travel Experts), the rights to run all the bars inside the departure area, for example.
That means, as a VG reporter alerted Meyer, that there is no price competition over a glass of beer at OSL. A large glass (0.6 liter) of beer costs NOK 97 (USD 16) no matter where an outbound passenger orders one. Prices are also the same for slightly smaller glasses of beer: NOK 88 for a half-litre and NOK 78 for a 0.4 liter glass, reported DN.
Meyer conceded that she doesn’t drink much beer herself, but she doesn’t think it’s right that there’s no price competition among the various outlets run by SSP. Prices are also standard for a wide variety of other drinks and retail items.
“When SSP is willing to pay Avinor NOK 3.6 billion (USD 600 million) for the concession to operate 30 serving places and kiosks at Gardermoen over a five-year-period, SSP has both a need and the opportunity to collect monopoly profits to finance the high contract amount,” Meyer wrote in a commentary published by DN earlier this week.
Now the competition authority she runs (Konkurransetilsynet) aims to prevent Avinor from entering into another such agreement when SSP’s expires at the end of 2016. “We’re evaluating two possibilities, either to bring action against the state, which owns Avinor, or directly against Avinor over possible abuse of market domination,” Meyer told DN.
Prices ‘in line with downtown Oslo’
Avinor officials defended the agreement with SSP, which runs similar retail food and beverage operations at more than 400 airports and train stations around the world. SSP also runs airline catering operations at the Stavanger and Sandefjord airports in Norway.
“We want to provide for the best possible (food and beverage) offerings to the public,” Avinor spokesman Sindre Ånonsen told DN. He added that competition during the concession round was stiff. He also insisted that price levels at the airport can’t be higher than at “comparable places” in central Oslo. He claimed the prices that SSP charges its airport customers are monitored during the concession period.
He conceded that SSP is a large player in the market but also claimed it does have some competition at the airport. “We also have Reitan and Umoe” at OSL, he told DN. Meyer wasn’t impressed.
“Maybe the beer-drinking public at Gardermoen needs to scream at least as high as football fans,” she wrote, referring to similar complaints when TV rights to football matches. “Regardless, Avinor should change its practice and allow more competition.”