The issue of competition in the Icelandic dairy industry has become a hot political topic in recent days.

Olina Thorvardardottir, Social Democrat MP, has called for a special meeting between the Parliamentary Trade Committee and representatives of the Ministry for Fisheries and Agriculture to consider the proposed merger of Mjolka and the Co-operative of Skagafjordur.

Mjolka is the only notable dairy company in competition with MS Iceland Dairies, and the Co-operative of Skagafjordur owns a sizeable stake in MS – which is itself also a co-operative.

Thorvardardottir argues that if the merger proceeds, competition will be all but wiped out. MS’s rapid expansion by a process of mergers and takeovers caused serious concern at the Icelandic Competition Authority, it was revealed yesterday. However, they were powerless to intervene as, in this case, agricultural production laws took precedence over competition laws.

MS Iceland Dairies is a for-profit co-operative owned by the nation’s dairy farmers. Its modus operandi is generally admired and not considered a threat; but its market share is what is causing alarm.

MS has more than a 98 percent share in Iceland’s dairy market, which is a massive industry for the size of the population. MS provides all kinds of dairy products, from milk and cheese, to butter and probiotic nutrition shots.