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Norwegian Government clarifies framework conditions

Orkla Executive VP Håkon Mageli

Orkla Executive VP Håkon Mageli

The Conservative Party’s business policy spokesman, Gunnar Gundersen, voices his support for the Non-Annex 1 raw material price compensation system (RÅK). At the same time,  Norway’s new Minister for EEA and EU Affairs, Vidar Helgesen, says he sees no need to reduce tariff rates for products such as pizza, chocolate and soups.

In today’s issue (21.11) of the DN business tabloid, Conservative Party business policy spokesman Gunnar Gundersen voices his support for the Non-Annex 1 system (RÅK). Under this system, Norwegian manufacturers of processed agricultural products receive compensation for purchasing more expensive Norwegian raw materials. The system is designed to even out the difference in the prices of Norwegian and foreign raw materials.

“For Orkla, this is an extremely important business policy signal. We at Orkla acknowledge the mutually dependent relationship between the food industry and the agricultural sector. A competitive industry is a prerequisite for the sale of Norwegian agricultural products, and it looks as though the Government now agrees on that point,” says Orkla Executive VP Håkon Mageli.

Protocol 3

Earlier this week, Minister for EEA and EU Affairs Vidar Helgesen stated that Norway does not wish to enter into negotiations with the EU on Protocol 3 to the EEA Agreement. The protocol regulates the tariff rates forprocessed agricultural productssuch as pizza, chocolate and soups.

At the same time, Vidar Helgesen made it clear that the Government takes a different stance onagricultural raw materials, such as cheese, meat and vegetables, in respect of which Norway and the EU have committed themselves to mutual tariff reductions in Article 19 of the EEA Agreement.

“We wish to respect Article 19 both in letter and in spirit. It is in Norway’s general interests to be loyal to the Agreement by reducing tariff rates and countering protectionism,” Mr. Helgesen said to the ABC Nyheter news agency.

Important for Orkla

Håkon Mageli takes a positive view of the fact that the Minister for EEA and EU Affairs now does not appear to be entering into negotiations with EU on Protocol 3. “As far as Orkla is concerned, the EEA Agreement is absolutely pivotal. We have operations in both the EU and Norway. The EEA Agreement and other legislation governing food determine the premises for a great deal of our activity,” says Mr. Mageli.

He emphasises that 90 per cent of Orkla’s food products in Norway are already exposed to considerable foreign competition, and that negotiations on reducing tariff rates for processed agricultural products should not be on Norway’s agenda.

“Import statistics speak for themselves. Far more processed agricultural products are imported to Norway than are exported. This shows that tariff rates for products entering Norway are moderate under Protocol 3,” Mr. Mageli points out.