
A 10-point plan published by Foodstuffs citing value for customers if their merger plan is allowed to proceed, flies in the face of all research
A vote by Foodstuffs supermarket owners to merge their North and South Island operations will further increase their dominance but consumers will be the losers at the checkout, the Grocery Action Group says.
.“Of course the Foodstuffs owners would vote for more power and control over the prices consumers pay, and also prices they pay their suppliers,” said Sue Chetwin, Grocery Action Groups chair.
“For the owners it’s about making their supermarkets even more into the money making machines they already are,” she said. “For them what’s not to like? But for their customers, such a merger would reduce the competition further and make it even harder for a new player to enter the market.”
The Commerce Commission is considering an application from Foodstuffs to merge its North and South Island operations. This follows its supermarket study which found unfair competition, unfair prices and excessive profits were hallmarks of the New Zealand grocery sector.
The OECD, in a report released this year, also said the supermarket sector in New Zealand lacked competition which meant consumers were paying too much for their groceries. It said it might be time to look at giving the regulator power to force divestment.
We strongly oppose the merger and agree the regulator should be given more powers to break up the big duopoly.
“The only possible comfort we took from yesterday’s announcement was Chris Quin, CEO designate of the merged giant, saying he welcomed competition and he hoped the New Zealand business environment enabled more. That should help the Commerce Commission reject the merger because approving it would most certainly lessen competition in our supermarket sector.”
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