The Government has put supermarkets on notice, and the message is clear: change at pace to increase competition and be prepared for regulation, Minister of Commerce and Consumer Affairs, David Clark announced today.
“The Government and New Zealanders have been very clear that the supermarket industry doesn’t work. It’s not competitive and shoppers aren’t getting a fair deal. The duopoly needs to change, and we are preparing the necessary legislation to do that,” David Clark said.
It comes as part of the Government’s formal response to the Commerce Commission’s market study into New Zealand supermarkets. The report found supermarkets earn $1 million a day in excess profits, straight from the pockets of Kiwi consumers.
The Commission made 14 recommendations including introducing a mandatory code of conduct to establishing an industry regulator and ensuring loyalty programmes are easy to understand and transparent. The Government has accepted 12 of the recommendations and is taking stronger action on the other two.
“The two recommendations not accepted relate to implementing a voluntary wholesale access regime and to a review of competition in three years. These issues can’t be kicked down the road. We need to address the underlying drivers of the lack of competition now.
“I spoke with both supermarket companies this afternoon to make this very clear. They know what is expected from them and the length of time we are prepared to give them to change before regulation kicks in.
“Given the pressure New Zealanders are under due to global inflation and cost of living increases, we can't afford to wait three years. Budget 2022 delivered a cost of living payment for about 2.1 million Kiwis to help with the impact of rising prices and fixing our supermarket sector is another action the Government can take.
“Our supermarkets know they’re in the spotlight, and we’ve recently seen some posturing around price rollbacks. However, it doesn’t fix the systemic problem at large – which is a lack of genuine competition in the sector.
“Alongside the retail stores, supermarkets have wholesale arms. We are calling on the duopoly to open these up to would-be competitors, at a fair price. Do this knowing the Government is determined to get a regulatory backstop finalised by the end of the year.
“If supermarkets do not strike good-faith wholesale deals with their competitors – our regulatory measures will make it happen for them. We are not afraid to unlock the stockroom door to ensure a competitive market.
“We are taking these actions because if competitors don’t have proper access to wholesale goods, there’s no real incentive to enter the market. You can’t run supermarket with empty shelves. And the New Zealand market clearly needs more competition.
For more information:
United Fresh New Zealand Inc
PO Box 66047 - Beach Haven
Auckland 0749
Tel.: +64 9 480 5057
[email protected]
