High demand for butter used in traditional Norwegian Christmas dishes causing major shortage in Norway, leading government to slash import duties on product

OSLO, Norway , December 15, 2011 () – High demand for butter used in traditional Norwegian Christmas dishes has caused a big shortage, leading the government to slash import duties on the cherished product.

Butter consumption has steadily increased in the Scandinavian country this year, partly because of the nation's increased popularity of low-carb but fat-rich diets. Growth in demand peaked at more than 30 percent last month, compared with November 2010.

That has caused empty shelves nationwide.

When Christiane Pevik goes to a grocery store the first thing she asks is if they have butter. Invariably, the answer is "no."

"It's really stupid because I just want to bake for Christmas," the 45-year-old housewife said at a supermarket outside the capital, Oslo. "But I guess it's no crisis really. I'm sure the butter will be back."

Matters were made worse by a wet summer that caused low and poor quality milk yields, hitting domestic butter production in a country with steep import tariffs, which have ensured that nine out of 10 butter packs on shelves are Norwegian.

The government decided on drastic measures and has cut import tariffs by more than 80 percent until the end of March. It has also lifted milk quotas for domestic farmers that were in place to avoid overproduction in the market.

Norway's largest dairy producer, Tine AS, says the reduced import duties will allow it to dramatically increase domestic butter output since it will be able to use foreign butter instead of domestic supplies used in the production of other commodities.

Tine, which supplies 90 percent of all butter to shops, had hoped to cover the scarcity by putting more than 1 million kilograms (2.2 million pounds) extra on the market this year compared to 2010.

But, a company spokesman, Oeystein Knoph, concedes it is probably too little too late for Christmas butter shoppers.

"This is a regrettable situation. Forecasts now show that the situation probably won't be back to normal until the end of January," Knoph said.

The dearth of butter has led to desperate measures.

Last week, customs officers arrested a butter smuggler with 90 kilograms (200 pounds) stashed away in his car when he crossed the border from Sweden. Hawkers have been offering Swedish butter on the Internet for 400 kroner a kilogram ($32 a pound) — about six times the normal shop price.

Fredrik Jakobsson, CEO of Swedish supermarket chain EuroCash, says his four stores near the border have sold 25 tons of butter in the past two weeks — about five times the usual amount.

"We sell more butter than ever before. This week we started to see a shortage," he said. "We had bought extra supplies, but it was still not enough, so now we are bringing in even more."

Norway's southern neighbor Denmark, a large dairy producer, extended a helping hand earlier this week with sympathetic viewers answering a breakfast TV show's plea by gathering a token 4,000 butter packs for Norwegians. Danish bloggers have also opened Facebook pages calling for help.

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