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Grocery giants team up against Lidl

Norwegian grocery retailers are joining forces in an effort to defend their lucrative turf against German discount chain Lidl, which is poised to open its first outlets in Norway.

Norwegian grocery retailers are joining forces in an effort to defend their lucrative turf against German discount chain Lidl, which is poised to open its first outlets in Norway. Traditional rivals hope to save millions by forming a new firm to help distribute their wares.

Norwegian consumers pay among the highest grocery store prices in the world, even after the introduction several years ago of local so-called discount chains like RIMI and REMA 1000. In turn, the men controlling Norway's grocery retailers and wholesalers rank among the wealthiest in the country.

The entry of Lidl into the market may change that, and give Norway's merchants some stiff competition. Arch rivals Coop, NorgesGruppen and Hakon are responding by quietly teaming up in some areas.

They're signalling an agreed price war against Lidl, which plans to open 65 new discount stores in Norway starting this summer. Through joint infomation technology and transport ventures, the Norwegians aim to cut costs.

It all should mean lower prices for consumers, who routinely pay as much as USD 2 for a small bunch of parsley or nearly USD 4 for a dozen eggs.

Halvor Nassvik, logistics director for Coop Norge, told newspaper Aftenposten that Norwegian retailers started thinking about a standardized distribution system for the entire branch before Lidl's plans for entering Norway emerged. The system involves an Internet portal where retailers can order wares, issue transport orders, make changes, check the status of deliveries and arrange billing and payment.

Now the rival retailers are moving forward with the system, called TakeCargo, "clearly to contribute to our strength in the battle against Lidl," said Nassvik.

Competition, he notes, is getting harder, "so it's important for us to rationalize where we can."