Supermarkets slammed for bad behaviour

Another day, another report that reveals how badly the duopoly supermarkets of

Woolworths and Foodstuffs are treating their customers and suppliers to benefit

themselves.

“Kiwi consumers deserve so much better than this. We are still paying some of the

highest prices on the planet to put food on the table and we have known this for

more than three years,” said Grocery Action Group chair Sue Chetwin.

Today’s report from the Commerce Commission slams the supermarket duopoly

sector for the way it treats its suppliers by making unrealistic demands of them and

asking them to wear costs the supermarkets should be covering. The Commission

also says this is a significant issue for any potential competitors who face an

insurmountable battle to get wholesale groceries at a reasonable price.

“The report reveals the supermarkets suppliers are being subsidised by around $5

billion in rebates, discounts and promotional payments. Competitors just cannot

compete with that power inbalance.

“It doesn’t work for consumers either because prices bounce around so much they

no longer know what a fair price might be,” Chetwin said.

“The report shows once again that despite the Commission and the Government

calling out this appalling behavour the incumbents continue to treat consumers and suppliers as if they own them,” Chetwin said.

“In many respects they do. Foodstuffs and Woolworths hold more than 80% of the

market. This lack of competition means consumers have no to little choice about

where they shop.”

Grocery Action also notes the large suppliers are complicit in this play because the

lack of competition also helps keep their prices high.

GAG is concerned improvements to the supply and wholesale codes proposed by

the Commission, including prohibiting retaliation against suppliers who assert their

rights will not be enough.

“The Commission is asking the duopoly to ‘voluntarily’ change the wholesale code

over the next 12 months – that’s like politely asking the greedy to stop being greedy.

It won’t work.

“We have already seen the duopoly play by its own rules. The industry has been on

notice since the Commission released its Supermarket Study in 2022, which said

supermarkets were making excessive profits and that a lack of competition meant we were paying some of the highest prices in the world for food, but nothing has

changed.

“Hopefully this latest report will assist the Grocery Minister Nicola Willis, to conclude

that forced divestment of the supermarkets to allow more competition needs to

happen now, not in some distant future. Consumers will thank her.”

Grocery Action background

The Grocery Action Group was formed to bring down the prices of groceries for all

Kiwis. Our vision is to influence government, the regulators and other parties to

deliver a competitive and consumer-focused grocery sector in New Zealand. Our

board is made up of consumer, industry, supplier and Māori interest experts.

Contacts

Sue Chetwin (chair) 021472748