Tāmaki Makaurau – Government has announced it is urgently pursuing options to generate more competition in the supermarket sector.
It will introduce an industry regulator; a mandatory code of conduct; a compulsory unit pricing on groceries and more transparent loyalty schemes.
It has put supermarkets on notice and it has changed at pace to increase competition and for supermarkets to be prepared for regulation.
Government says the supermarket industry doesn’t work. It’s not competitive and shoppers aren’t getting a fair deal. The duopoly needs to change, and government is preparing new legislation to change the system.
The new comes as part of the government’s 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. Government has accepted 12 of the recommendations and is taking stronger action on the other two.
Given the pressure New Zealanders are under due to global inflation and cost of living increases, government is acting with speed.
The supermarkets know they’re in the spotlight, and they have responded with 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 says it 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 they will unlock the stockroom door to ensure a competitive market.