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Commerce Commission to give initial ideas on supermarket probe next month

Supermarket shopper

The Commerce Commission has opened up on the process of its forthcoming study of the supermarket sector, which will aim to find out if the sector could be more competitive.

The study will analyse the structure of the grocery industry, the nature of its competition levels, pricing practices of major grocers, procurement practices, as well as the quality and range offered to consumers.

A preliminary issues report will be released by the end of this year, the Commission said, while a draft report is expected to be released next July and a final report made available by November 23 next year.

“The price and quality of groceries have an impact on all of us. Groceries are a major expense for households, with more than $22 billion spent at New Zealand supermarkets and grocery stores in the past year,” Commission chair Anna Rawlings said.

“New Zealand has one of the most concentrated retail grocery sectors in the world. If retail competition is working, our study would expect to see grocery retailers competing to win customers based on factors such as price, quality, choice, and service.”

The probe was announced on Tuesday, with both major supermarkets, Foodstuffs and Countdown, agreeing to comply with the study.

ConsumerNZ also backed the decision, and said it believes Kiwis are paying too much at the till due to the supermarket duopoly undoing any competitive pricing pressures.

“We need a wide-ranging investigation to gauge the degree to which the stores’ market power is affecting how much consumers pay,” ConsumerNZ chief executive Jon Duffy said.

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