Reykjavík Grapevine - 10.10.2014, Page 10

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flattering news story about Gísli Freyr.
While the court is unlikely to agree,
this may be because they are currently
backlogged with rulings about wheth-
er “Pokes” are harassment and if “See
Friendship” constitutes stalking.
Despite what you may have seen
on television, farming is a profes-
sion fraught with peril: foul weather,
pests, and of course, sheep-eating
ravens are all hazards the Icelandic
farmer must contend with. Farmer
Indriði Aðalsteinsson discovered the
latter himself, when two ravens mur-
dered his spotted ewe during the
night. He has plotted revenge, which
is to be expected. Less expected: he
was reportedly so angry at the ravens
that he composed a poem about them.
Let that be a lesson to any other ravens
reading this right now.
In probably the best news we’ve
heard all year, Afghan asylum
seeker Ghasem Mohamadi has fi-
nally been granted asylum in Iceland.
The process was very simple, really. All
he had to do was come here; wait two
years without being allowed to work;
go on a hunger strike, inspiring people
to hold protests and distribute a peti-
tion; and put continuous legal pressure
on the Ministry of the Interior to grant
him the privilege of living in Iceland.
Easy peasy! (Seriously, congratula-
tions, Ghasem, and welcome to your
new home.)
Meanwhile the volcanic erup-
tion at Holuhraun rages on
with no end in sight. There is a steady
stream of lava, tons of earthquakes
happening every day, and loads of gas
pollution, some of which has made its
way to the South West of Iceland. But
don't worry, you're relatively safe un-
less you try going to the eruption site
itself. That didn’t stop super-wealthy
Kazakh fashion icon Goga Ashkenazi
flying to eruption and dancing there
with her entourage—not cool, Goga,
totally not cool.
For decades, smaller pro-
ducers have attempted to
break MS's monopoly in
production and retail. So
far, such attempts have
been short-lived.
Dairy | Scandal
10
The Reykjavík Grapevine
Issue 16 — 2014
A Cow-Op, if you will
If you buy any dairy product in Iceland,
chances are it was produced and mar-
keted by Mjólkursamsalan—the Milk-co-
vendor, MS for short. MS was originally
founded in 1935, though its most recent
embodiment was technically established
in 2005. It is registered as a co-operative,
and owned, through two intermediaries,
by the country's 700 dairy farms. MS and
its associates, the conglomerate in whole,
hold a 99% market share in the field. All
the country's milk farmers must sell their
raw product to MS, from which other
potential producers must then purchase
it. On top of that, importing foreign dairy
products remains forbidden, leaving the
whole field, more or less, to one party.
For decades, smaller producers have
attempted to break MS's monopoly in
production and retail. So far, such at-
tempts have been short-lived. As detailed
in Kastljós earlier this week, MS has re-
peatedly hindered competition in various
ways: by selling raw milk at a higher price
to competitors than to its associates; by
outright refusing to sell unpasteurized
milk for yoghurt production; by buying
smaller companies and taking over their
production, and so on.
What a peculiar way to
rejoice
Late September, the Icelandic Competi-
tion Authority fined MS for abusing its
dominant market position, by selling
milk at a 17% higher price to its competi-
tors than to its own associates. The fine
was set at 370 million ISK, roughly equal
to 2.4 million Euros. The charges were
pressed by one Ólafur Magnússon, for-
mer owner of dairy producer Mjólka. Re-
portedly, Mjólka nearly went bankrupt in
2009. At that point, one of the two parties
which own MS on behalf of farmers, the
co-op KS, bought Mjólka and took over
its production. Ólafur went on to found
another production company in the same
field, Kú. Just as Mjólka before, Kú must
buy its raw milk from MS. Since the Sep-
tember ruling, MS is, for the time being,
forced to sell to Kú at the same price as to
its own associates.
MS has signalled that it will not suffer
this ruling gladly, announcing that they
will appeal the verdict. Egill Sigurðsson,
chair of the co-operative's board, said on-
air that there is nothing unnatural about
selling milk at a higher price to competi-
tors "than the price at which we make
transfers within the conglomerate". He
further said that the ruling is based on a
misunderstanding, and that MS in fact
'rejoices at any competition'.
Ólafur Magnússon replied that MS
had "deliberately and repeatedly killed
new companies" in the field. There seems
little need, however, to take his word for
it. Prominent Progressive Party member,
former Minister of Agriculture, Guðni
Ágústsson, now heads a dairy farm-re-
lated 'association' whose only members
are now, in fact, MS and its associates. In-
terviewed in Kastljós, Guðni expressed
doubts that the MS-conglomerate consti-
tutes a monopoly, since it competes with
Coca-Cola and other beverage producers.
Much easier when you are
at both sides of the table
Further blurring the lines between busi-
ness and politics in the field, Kastljós
revealed the background of Ministry of-
ficial Ólafur Friðriksson. As office man-
ager of agricultural affairs at the Ministry
of Agriculture for
twenty years, Óla-
fur chairs the Min-
istry's Agricultural
Pricing Committee,
which decides the°
price of milk, na-
tion-wide, and sits
on the Advice Board
on imports and ex-
ports of agricultural products, which de-
cides on possible exceptions from the ban
of agricultural imports. He chairs many
other related committees and boards
within the ministry. Before taking on the
job, however, he was the manager of KS,
one of MS's two parent companies. Fur-
thermore, according to Kastljós, in the
last twenty years, Ólafur has been board
member of some fifteen corporations
related to KS. In other words, if there is
a separation barrier between business in-
terest and state power, in the field of dairy
production, it certainly seems porous.
The Progressive Party's current
Minister of Agriculture, Sigurður Ingi
Jóhansson replied that politicians, such
as himself, should be held responsible,
and not individual ministry staff mem-
bers. The day after, interviewed for radio,
he exclaimed a lot of: "What sort of past
connections do the journalists have?
Shouldn't people start with themselves,
if they head on this sort of journey?
Shouldn't journalists start by examin-
ing their own past relations?" A line of
defence which, for the record, sounded
no stronger when spoken than it does in
print.
You bunch of drivelling
market-dogmatists!
To be fair, more valid arguments have
been made in support of the current ar-
rangement. In recent articles, Left-Green
MP Ögmundur Jónasson, the former
Minister of the Interior and now a mem-
ber of the opposition, has insisted that de-
manding competition in the field would
be no less dogmatic than demanding a
continued monopoly.
He says that while
MS makes it possible
for small farms to de-
fend their interests,
state-regulated prices
keep the monopoly at
bay and protect the
interest of consumers.
Leading to increased
productivity and lower prices than an
unregulated dairy market would, he as-
serts that all in all the setup has served
the interest of both.
Until someone can tell the actual dif-
ference between Skólaostur, Brauðostur,
Góðostur, Heimilisostur, Samlokuos-
tur, Pizzaostur, Gratínostur, Gotti and
Fjörostur, dairy-consumers may beg to
differ.
The Milk
Monopoly
Words by Haukur Már Helgason
Photo by Páll Ívan frá Eiðum
Allegedly, a dozen differently labelled sorts of Icelandic
cheese all taste the same. People have been in doubt about
how to express their frustration at this, but have since the
start of the week found a focal point for their anger: that bu-
reaucrat in the Ministry of Agriculture... what's his name?
We will get to that. The Icelandic milk market is a de facto
monopoly, run in close cooperation between MS, the coun-
try's dairy conglomerate, and state authorities. Retail prices
of milk, as well as wholesale prices of raw milk, are, to this
day, fixed by the Agricultural Pricing Committee. This per-
ceived anomaly, within a society that often considers itself
market-oriented, is common knowledge. Earlier this week,
however, when RÚV's news magazine show Kastljós re-
vealed some of the tactics involved in upholding MS's mo-
nopoly, indignation ensued.
NEWS
IN
BRIEF