FINLAND Trends and Developments Contributed by: Anna-Stéphanie Roubier, Johanna Kauppinen and Milja Vuopio, HPP Attorneys Ltd
HPP Attorneys Ltd Bulevardi 1 A FI-00100 Helsinki Finland Tel: +358 9 474 21 Fax: +358 9 474 2222 Email: firstname.lastname@hpp.fi Web: hppattorneys.com
Private label products: opportunity, concern and political controversy Private label products are sold under the retailer’s name, as opposed to the producer’s brand. In Fin - land, private label products account for approximately a quarter of daily consumer goods by value, a share that has remained broadly stable since 2016. There is, however, considerable variation by product cat - egory: private labels account for a large proportion of sales in dairy, meat and fresh produce, and a much smaller share in categories such as bread and hot beverages. The former category, ie, products with a high private label share, has become the focal point of a significant political debate. The Finnish govern - ment has published draft amendments to the Finnish Food Market Act that will (if enacted) among other things, prohibit retailers from giving their own-brand products preferential treatment over branded alterna - tives in shelf-space allocation, product placement and promotional prominence. What the FCCA’s research shows The FCCA’s analysis of the Finnish food supply chain has provided several significant findings that chal - lenge prevailing assumptions about how the market operates. These findings include the following: • Retail margins are higher on own-label products than on branded goods. In 2022, the average mar - gin on private label products was approximately 31%, compared to approximately 26% for branded products. Both margins increased in the period between 2018 and 2022. • The distribution of margins between producers and retailers is more nuanced than previously thought.
Daily Consumer Goods Market The national competition regulator continues in-depth analysis of the market in the face of high concentration levels and higher margins for private label products Finland’s daily consumer goods market is one of the most concentrated in Europe. Two players – the S Group (SOK) and Kesko, both vertically integrated and active in various consumer markets – together account for over 80% of all sales in the country. The high level of concentration has given rise to sustained public debate. Critics have pointed to high prices of daily consumer goods, the limited bargaining power of food producers that translates to low producer prices, and the dominance of the two chains as symptoms of a market that does not function as well as it could. The Finnish Competition and Consumer Authority (the “FCCA”; Kilpailu - ja kuluttajavirasto ) has in recent years focused its analytical work on the daily con - sumer goods market. It has published a series of detailed economic studies examining how prices are formed across the food supply chain, how margins are distributed between retailers and food producers, and what role private label products play in shaping competitive dynamics. This research, which draws on granular, transaction-level data obtained directly from the major market participants, represents one of the most comprehensive empirical appraisals of a national daily consumer goods market undertaken by a Euro - pean competition authority.
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