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Reckoning day nears for grocery retail duopoly

Countdown supermarkets
(Source: Bigstock)

The final report by the Commerce Commission on its market study into New Zealand’s grocery sector will be published next week. 

Media representatives have been invited to a briefing in Wellington on Tuesday at 8.30am and advised that given the market sensitivity of the contents, no copies will be released in advance under embargo. 

The full report will be made available to the industry and the public on the commission’s website at the same time as the briefing begins. 

That suggests the nature of the final recommendations may be even stronger than the preliminary findings released last July, which drew considerable feedback and further submissions. 

The commission said at the time that New Zealand has – in effect – a grocery retailing duopoly that is not serving consumers well. It said New Zealanders are paying too much for groceries compared to people in other international markets, and that the major two retail chains – Australian-owned Countdown and the local co-operative Foodstuffs group – are stifling innovation and making persistently high profits in the absence of serious competition. 

“Our preliminary view is that the core problem is the structure of the market. In competitive terms, the major retailers, Woolworths NZ and Foodstuffs, are a duopoly, and while there is an increasingly diverse fringe of other grocery retailers, they have a limited impact on competition,” said commission chair Anna Rawlings.  

Next Tuesday morning, Rawlings will deliver a brief presentation outlining the commission’s findings and recommendations. Which are likely to spark widespread political debate.

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