Norway Has a Shortage of Butter?

This is not a joke. Norway does indeed have a shortage of butter. One of the nations known for its export of dairy products, these days can’t supply its own market with butter. So bad is the situation that online speculators offer half-kilo (a little over a pound) packs of butter for 35 euro each! Stores in Norway see long lines of people waiting to buy butter; a sight that Europe hasn’t seen since the fall of Communism.

And a few days ago, a Russian smuggler of butter was arrested at the border with Sweden with 90 kilos of butter in his car. If we imagine he wanted to sell them for a third of the online speculators’ price, he had cargo for 2,100 euro in his car, or about $2,800!

How can this happen? We have heard of shortage of gasoline in Iran, of water and power in Venezuela, of grain in Russia. But a shortage of butter in Norway.

Tine, Norway’s supplier of dairy products, claims that it is because of the rainy weather this summer. But wait, neighboring Sweden had even worse weather, and their stores are stocked up on butter. (Why else would that smuggler would risk to run the Norwegian border?) Another explanation offered is the “ballooning popularity of low-carb diets.” Hmm, does only Norway have that problem? And yet, only Norway has a shortage of butter.

What’s so different about Norway then?

The answer comes when we consider the fact that Tine is actually Norway’s monopolist supplier of dairy products. Norway actually has government monopolies who are entrenched in their position of monopolists by government law. Tine’s official monopoly was endangered twice: First in 1994 when Norway had a referendum for joining the European Union. If it had joined, Tine would have had to say goodbye to its monopoly. Norway’s voters voted against joining. Then in 2004 a minister in the cabinet tried to split the company by force on accusations of abusing its monopoly. The attempt was unsuccessful.

Well, now the logical end of all monopolies can be seen in Norway: shortages. The Soviet Union saw many of those, having a total government monopoly on every economic activity. The black market was what kept millions of people from starvation. Now Norwegians will have to go to the black market and buy butter at higher prices, if they want to be able to prepare their traditional Christmas pastries.

Or, even better, force their government to repeal Tine’s monopoly. Monopolies never stop until they have destroyed the whole market. Unless Norwegians want to experience the same market conditions as we Eastern Europeans experienced for 40+ years, they will have to say goodbye to their socialism.