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New competition law could target supermarket sector

Countdown WaihekeNew Zealand Prime Minister Jacinda Ardern has noted her intent to push through a law allowing the Commerce Commission to compel companies to prove they are operating competitively, with supermarkets being a potential target.

Ardern said that she would nominate the petrol sector initially, but that supermarkets could be a likely target moving forward.

“Other areas around the cost of living have been raised, particularly when New Zealanders compared what happens in Australia,” Arden told Stuff.

“Kiwis say, “Why are we seeing that marked increase here?’. I wouldn’t be surprised if we see a nomination in other areas like [supermarkets].”

New Zealand’s supermarket industry is dominated by two major players, Countdown and Foodstuffs, which control the four major supermarkets brands.

The new law would require an industry to be nominated to Commerce Minister Kris Faafoi, and would involve consultation with the sector.

But Retail NZ’s Greg Harford doesn’t think there is a problem to solve.

“I’m not sure there is actually, really a problem that needs to be addressed,” Harford told Newstalk ZB.

“You’ve got the two major supermarket chains operating four brands between them, there’s a lot of niche grocery players… there’s strong competition between those big companies and everyone else who’s playing in the market.”

Harford noted that in the US more than half of all food is bought outside the grocery sector from restaurants and cafes, and that the New Zealand market is heading in that direction as well, which is creating competition for the supermarket industry.

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