Media release: Reaction to NZ First

The Grocery Action Group welcomes the announcement from NZ First today that it will campaign on breaking up supermarket giant Foodstuffs but says it is concerned at the lack of meaningful detail in NZ First’s new election policy.

Grocery Action Group chair Sue Chetwin said key questions remained, particularly regarding the fate of the other major retailer, Woolworths, and what concrete measures would be introduced at the wholesale level to foster true competition and fairer prices.

“New Zealanders deserve to know how these changes will affect both supermarket giants and what concrete measures would be taken in the wholesale supply to foster true competition and fairer prices,” she said. Currently wholesale and retail markets are controlled by the duopoly of Foodstuffs and Woolworths, meaning suppliers are at the mercy of these giants.

Between the two of them they control more than 80% of the grocery market.

The proposal from NZ First to break up Foodstuffs brands of Pak’nSave and New World plus Four Square is welcomed but does not take account of Woolworths and its sub brand Fresh Choice, Chetwin said.

Other issues included the fact that in some areas of the country, the

supermarkets operated as monopolies and this policy would not address that.

Chetwin said her group had been waiting for the Minister Nicola Willis to announce details of a consultant’s report on the economics of breaking up the duopoly. The report was expected in December but nothing had been forthcoming.

While the NZ First policy announcement also included proposed new powers for the

Commerce Commission, it did not say those included the ability to break up industries that were seen as being anti-competitive. Chetwin said from a consumer perspective, the ability of the regulator to set the rules was of utmost importance.

“It is in the best interests of all Kiwis that real and fair competition operates in the

supermarket industry so that food and groceries are available at affordable prices,” she said.