December 22, 2011

NORWAY: A Serious Butter Crisis

I'd like to share the exchange I had with my friends on Facebook after I shared this video.

Josette (Me): LOL!!! Red Eye just aired this video. I totally felt for the guy. I wish I could send him some butter. ;D

Vanessa: LMAO, Josette... OMG I cant stop laughing!

Bernardette: hahaha omg! Too funny!

Josette: This video is in response to all of the comedians in the U.S.A. that have been making fun of Norway not having any butter. :)

Marc: I will gladly give my extra butter to any cute Swedes in need! :-)

Josette: @Marc, lol be careful you will get arrested for smuggling butter into the country. ;)

Jet: I'm sorry... but, I just couldn't stop laughing at the glam queen complaining about a slippery stick filled with protein ~ LOL.

Josette: @Jet, glam queen or not... you try cooking good yummy food or baking pastries without BUTTER. Don't shoot down the messenger. I enjoy toast in the morning and can't imagine not having butter. Or how about no butter for a baked potato. We take butter for granted. We don't know what we have UNTIL we lose it. ;)

Josette: All I can say is while comedians in America are making fun of what's going on in his country, his video is drawing attention to the seriousness of GOVERNMENT CONTROL of our eating habits and what we have access to! Butter is a basic staple food. That's MARXIST SOCIALISM for you! Noway is DESTROYING all of the confiscated butter that is being smuggled into their country. What a WASTE!!!


Open Market: The blog of the Competitive Enterprise Institute
written by Daniel Rivera Greenwood
Tuesday December 20, 2011

Norway, a fully industrialized country and ranked first in the latest Human Development Index, a United Nations’ metric that tries to quantify the quality of life across countries, is suffering through a butter shortage, a common food staple and an important input in the food industry. Food shortages wouldn’t be out of place in places like Cuba, North Korea, Venezuela and some poor Sub-Saharan nations; it is almost unfathomable that they occur in one of the most developed nations in the world.

Norwegian authorities seem puzzled by the shortage and subsequent rise in butter prices. They blame a new low-carb high-fat diet craze for the additional demand. Additionally, heavy rains during the summer affected grazing areas for cows, which resulted in reduced milk production. The shortage is especially alarming during the Christmas season, where many traditional recipes rely on significant amounts of the dairy product. Norwegians have actually resorted to churning their own butter, including a restaurant owner interviewed by The Wall Street Journal: “We have to [churn butter]. We can’t get hold of any butter, not any at all. And it’s right before Christmas, so we have a lot of customers. It’s really strange. It takes a lot of time since we use hand mixers.”

While the diet combined with unfavorable conditions for dairies has limited the amount of available domestic butter, it doesn’t address the biggest issue for the limited quantities of the good: trade regulations.

Since Norway is not part of the European Union, imports from other nations are subject to tariffs and other protectionist restrictions. Butter tariffs in Norway equaled 25 kroner per kilo (about US$ 4.25), effectively eliminating any incentive to import butter from abroad. While the tariff was lowered to four kroner in December allowing Norway to import more than 750 tons of butter for consumers and 1,000 tons for industry, it will do little to solve the shortage, as it will take time for butter to become available to consumers.

The result: A black butter market. One seller on a Norwegian auction website offered 500 grams (1.1 pounds) of butter Tuesday for roughly 30 times the normal price. Two Swedes were arrested in Norway for smuggling around 550 pounds of butter into Norway. Danish and Swedish airports are selling butter at their free-duty shops. Swedish supermarkets are enticing Norwegian customers living near the border with free butter. In short, market forces and regulations have created some incredible situations in one of the wealthiest nations in the world.

The government response has been unsurprising. As Agricultural Minister Lars Peder Brekk said last week: “The market regulations are important to uphold long-term stability in the production of food in Norway.” Unfortunately for the Norwegian government, only free trade creates stable markets. Complete dependence on domestic markets leaves Norway open to unexpected local calamities that could make prices volatile. Free trade distributes risk among many different countries, so an event in one country will have a smaller effect on availability and overall prices of goods. Finally, given the Norwegian government’s record on butter and unwillingness to change policies, Norwegians might face shortages in other goods as well.


The Telegraph UK
written by Richard Orange in Malmรถ
Monday December 19, 2011

Two Swedes have been arrested by Norwegian police for smuggling more than 250kg of butter into the country, offloading one consignment for more than £25 a packet.

The two men, from the Northern city of Umea, managed to make their first delivery before a police patrol stopped their van on Saturday evening.

"They allegedly sold the coveted butter packets in Beitstad Steinkjer before they drove north along the county road 17," police officer Lars Letnes told Norway's Adresseavisen newspaper.

"Then they were stopped by a police patrol, which found 250kg of butter in the small van." A sudden spike in demand has left Norway with a butter shortfall of between 500 and 1,000 tonnes, leaving the country's citizens facing Christmas without their seven traditional varieties of home-cooked biscuit.

Swedes have posted nearly 100 adverts on the local auction website Blocket offering to drive butter across the border at prices ranging from £20 to above £50 a pack.

The poster of one of the adverts, Yusuf, from Gothenburg, told the Daily Telegraph that he was now making two trips a week to service clients in Oslo, the Norwegian capital, but refused to give more details.

The arrests follow the seizure earlier this month of a 90kg consignment found stashed in the car of a Russian man at the Norwegian-Swedish border. The Norwegian police plan to destroy the confiscated butter.

No comments: