For years we’ve been told that New Zealand’s supermarket sector isn’t competitive enough.
With grocery prices top of mind for many voters, political parties are putting forward plans to try to change that.
National wants to give the Commerce Commission a new mandate to look at separating Foodstuffs into “two genuinely competing nationwide grocery chains” if elected.
The policy intends to split Foodstuffs North Island and Foodstuffs South Island, with New World and Four Square as one nationwide chain and Pak’nSave as another.
The move would be subject to ComCom approval.
Meanwhile, Labour is laser-focused on making price-gouging illegal, putting supermarkets at the centre of a broader crackdown that covers not only groceries but also energy, fuel, telecommunications, banking and insurance.
Act has called both ideas “draconian” that will “make supermarket competition worse”. The party prefers cutting red tape to make it easier for new entrants to build supermarkets.
In April, New Zealand First unveiled its plan to “end the supermarket duopoly” and break up Foodstuffs in the same way, as well as giving “real enforcement powers” to the commission.
The Green Party also wants to ban supermarket price gouging and create a publicly owned supermarket chain called KiwiMart with a single mandate to bring prices down.
NZ Herald senior correspondent Katie Bradford told The Front Page that this is definitely a cost-of-living election campaign.
“Both National and Labour are really wanting to hammer that message home,” she said.
“I think what’s been really important is that we have seen these incremental changes over the years. [For] a lot of people the argument is that there isn’t actually one silver bullet.”
She said that ultimately, everyone agrees that competition is the ultimate goal, but there’s some disagreement on how to get there.
“Despite their sniping at each other, there’s actually a lot of room where they agree on this, National and Labour in particular.
“We pay really high grocery prices compared to the rest of the world, and that’s been one of the key findings in all these reports we’ve seen. Why hasn’t a competitor come in? Why have they not been able to?
“One of the questions to the Government, to Nicola Willis today was, well, won’t this stop potential competitors coming in because they’ll think, ‘Oh wait, so if a Government can just come in and force a structural separation, why would we take a risk on this market,’ right?
“Nicola Willis’ argument is the opposite, actually. They say, ‘Well, they’ll be able to see there is room for competition, so come on in.’ Again, that’s a kind of a wait-and-see if it works,” Bradford said.
Listen to the full episode to hear more about:
- GST and grocery prices
- Are supermarkets the ‘bad guy’?
- International players
- A lack of competition.
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5pm. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.