In the final months of 2011, a low-carb, high-fat diet exploded in popularity in Norway, pushing the country to consume its entire stock of butter.
The Norwegian government’s virtual monopoly on the dairy industry allowed for very little competition in butter production. That, coupled with high import tariffs and bad weather, resulted in a nationwide butter shortage.
This is the story of the 2011 Norwegian butter crisis.
The Shortage Begins
During November 2011, demand for butter rose by 30% due to a new low-carb, high-fat diet gaining popularity in Norway. Some shops started to run out of butter and had to post notices apologizing to their customers.1
By November 18th, the scarcity of butter had turned into a full-blown shortage and empty shelves where butter once stood was now a common sight in Norway. After nearly two weeks, the Norwegian government finally lowered the tariff on butter in an attempt to ease the pain of the shortage. Even so, the damage had already been done and Norwegians were in for a rough December.23
The Butter Smugglers Make Their Entrance
The price of butter skyrocketed due to the shortage. On Norway’s most popular auction site, butter was selling at 400% its normal price.4 Once people realized how much money could be made off selling butter to Norwegians, the smuggling began.
On December 9th, a Russian man was caught trying to smuggle almost 200 pounds of butter into Norway without paying the tariff. With the current butter prices at the time, he could have made $4,680 had he been successful.56
Undeterred, two Swedish men decided to smuggle even more butter into Norway on December 17th. They were only able to make one delivery before getting arrested. The Norwegian police found 550 pounds of butter in the Swedes’ car, which they promptly planned to destroy.78
Everyone Plays The Blame Game
For the question of what caused the shortage, everyone’s answer was different.
The dairy farmers blamed Tine, the dairy industry’s largest company (and virtual monopoly). They alleged that Tine failed to inform them early on about higher demand quotas and also continued to export butter even as a domestic butter shortage drew near.
Tine blamed bad weather and the unusually high demand for butter brought on by the new diet. It argued that “the wet summer resulted in poor-quality animal feed that affected milk production.” For reference, demand had risen by 30% while Norway’s cows had produced 20 million fewer liters of milk that year.9
Many Norwegians blamed their government’s protectionist policies which had placed high tariffs on butter as well as an import quota. This severely limited the amount of butter that other countries could export to Norway, making the crisis much worse.10
Professor Arne Nygaard of the Norwegian Business School blamed the shortage on Tine. He said “the problem is more to do with a lack of competition in the market” and that “Tine is a monopolist in the market as a result of outdated postwar regulatory regimes in a concentrated market with high entry barriers.”11
Tine to Pay the Piper
As previously mentioned, Tine is a Norwegian government monopoly that is simultaneously a producer of dairy products and the market regulator. Torgeir Trældal, the agricultural policy spokesman for the Progress Party, decided to hold Tine accountable for the shortage. Trældal claimed that "groceries and food chains lost [NOK] 43 million" due to the butter shortage and called on Tine to cover the losses.12
Andersen, Audrey. “Butter Shortage Takes the Biscuit in Norway.” The Irish Times, 20 Dec. 2011, https://www.irishtimes.com/news/butter-shortage-takes-the-biscuit-in-norway-1.13569.
Berglund, Nina. “Butter Shortage Frustrates Bakers.” Norway’s News in English, 18 Nov. 2011, https://www.newsinenglish.no/2011/11/18/butter-shortage-frustrates-bakers/.
Berglund, Nina. “Butter Shortage Slices High Tariffs.” Norway’s News in English, 30 Nov. 2011, https://www.newsinenglish.no/2011/11/30/butter-shortage-slices-high-tariffs/.
Koranyi, Balazs. “Diet Craze Leaves Norwegians Starved of Butter.” Reuters, 7 Dec. 2011, https://www.reuters.com/article/diet-butter-norway-idINDEE7B60JL20111207.
Taylor, Adam. “A Russian Man Was Caught Trying to Smuggle 200 Pounds of Butter into Norway.” Business Insider, 12 Dec. 2011, https://www.businessinsider.com/norway-butter-2011-12.
Linde, Joel. “Sweden Safe While Butter Shortage Hits Norway.” The Local Sweden, 11 Dec. 2011, https://www.thelocal.se/20111211/37872/.
Sheridan, Michael. “Butter Smugglers Busted in Norway.” New York Daily News, 19 Dec. 2011, https://www.nydailynews.com/news/world/butter-smugglers-busted-norway-article-1.993819.
Orange, Richard. “Swedes Arrested for Butter Smuggling.” The Telegraph, 19 Dec. 2011, https://www.telegraph.co.uk/news/worldnews/europe/sweden/8965649/Swedes-arrested-for-butter-smuggling.html.
Andersen, Audrey. “Butter Shortage Puts the Knife into Norwegian Christmas Plans.” The Guardian, 14 Dec. 2011, https://www.theguardian.com/world/2011/dec/14/norwegian-butter-crisis-shortage-christmas.
Worstall, Tim. “The Great Norwegian Butter Famine.” Forbes, 14 Dec. 2011, https://www.forbes.com/sites/timworstall/2011/12/14/the-great-norwegian-butter-famine/.
Andersen, Audrey. “Butter Shortage Puts the Knife into Norwegian Christmas Plans.” The Guardian, 14 Dec. 2011, https://www.theguardian.com/world/2011/dec/14/norwegian-butter-crisis-shortage-christmas.
“FrP Requires Tine to Pay for Butter Crisis in Norway.” The Nordic Page, 12 Mar. 2012, https://www.tnp.no/norway/economy/2782-frp-requires-tine-to-pay-for-butter-crisis-in-norway/.