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. Last Updated: 07/27/2016

Norwegians Flock to Sweden for Groceries

SVINESUND, Sweden -- Rich from oil and fed up with steep prices at home, Norwegians are flocking across the border to EU neighbor Sweden for cheaper food and alcohol in a mounting shopping frenzy.

Despite recent tax cuts, Norway has struggled with a surge in border shopping since voters said no to European Union membership in 1994. Norwegians were expected to spend a record 11 billion crowns ($1.24 billion) in Sweden in 2001.

"It's crazy. They shop like they've never seen food before," said 31-year-old Camilla Cederquist, one of very few Swedish shoppers at Svinesund in southwest Sweden, where an estimated 35 percent of border shopping takes place.

Norway, ranked the No. 1 country in the world to live by a 2001 United Nations Development Program report, funds a generous welfare state by high taxes on everything from alcohol to gasoline. And Oslo pays huge subsidies to keep farmers in business in a nation stretching high into the Arctic.

But many Norwegians dodge the steep prices via a short drive to Sweden, which has done more to ax its high Nordic prices since joining the EU in 1995 in a drive to harmonize with cheaper levels elsewhere in the 15-nation bloc.

"The main negative effect from border shopping is reduced income for the [Norwegian] state," said economic analyst Kyrre Aamdal. "But for the man in the street, it's a bargain."

On an average Saturday, the motorway linking Oslo to what many Norwegians know as a "shopping heaven" just across the Swedish border is jammed with Norwegian cars, sometimes stuck in traffic jams for several hours.

"It's worth a few hours in the car when the savings just on alcohol pay for the trip," said 70-year-old pensioner Svein Storkaas from Horten in southeast Norway.

Leaning over a freezer packed with pork ribs at the giant MaxiMat food store at Svinesund, Storkaas shakes his head and smiles over his more than 50 percent savings on meat.

"When I see these prices, I always ask myself why anyone would do any shopping in Norway at all," he said. Svinesund is a two-hour drive from Oslo.

Pork ribs sell for about 30 Swedish crowns ($2.80) per kilogram at MaxiMat, less than half of the price in Norway. One newspaper once noted that Swedish meat prices were comparable to those of dog food in Norway.

Many Norwegians fail to see why Norway should have some of Europe's highest taxes when the country is the world's No. 3 oil exporter behind Saudi Arabia and Russia.

Norway pumps about 3.2 million barrels of oil a day, worth about $7,000 for each of Norway's 4.5 million citizens a year.

A new Norwegian tax-cutting center-right coalition that took office in October has promised tax reforms, but so far modest cuts in alcohol taxes have been eaten up by even steeper cuts in Swedish prices.

Norwegians have twice in referendums, in 1972 and in 1994, rejected membership of the European Union, and with Sweden gradually harmonizing its prices with the rest of Europe, the gap between Norwegian and Swedish prices is growing.

Sweden cut its wine prices on Dec. 1 by 19 percent in a wider EU effort to harmonize alcohol duty rates to restrict cross-border shopping -- a move that will only boost sales to Norwegians.

"Politicians are probably the most stupid people I know. Don't they understand that all our cash ends up in Sweden," Storkaas said.

He said he had voted against EU membership.