Consumer NZ welcomes swift moves from the Government to address lack of supermarket competition

Consumer NZ welcomes the announcement that a Grocery Commissioner is set to be appointed, and the release of the consultation paper on the Grocery Code of Conduct.

“This is one of many moving parts in response to the Commerce Commission’s market study and we are impressed with the speed at which the Government is moving,” said Consumer chief executive Jon Duffy.

“This sends a clear message to the supermarkets: they cannot keep making super profits at the expense of struggling consumers.

“That said, the devil is in the detail – the Grocery Industry Competition Bill will set the powers of the regulator, and the mandatory code of conduct will set the rules for fair play between supermarket industry participants.”

Consumer will provide feedback on the mandatory code of conduct to ensure it delivers for both suppliers and consumers.

Consumer’s recent sentiment tracker research found over the past year, the cost of food has risen from eighth on a list of financial concerns for households, to third, after rent and mortgage payments.

“We know the cost of food is a major concern, costs are amplified by the lack of competition in the supermarket sector,” Duffy said. “New Zealanders deserve fair prices at the checkout. More than 78,000 people from around the country signed our petition to push the Government to go beyond the Commerce Commission’s market study recommendations. We will continue to keep a close eye on the sector and encourage consumers to let us know when they see concerning behaviour by the supermarkets.”

Following the Commerce Commission’s calculation the duopoly is making $1 million in excess profits a day, sentiment towards the supermarkets has shifted over the last year, with trust plummeting. Of the 15 industries measured, supermarkets saw the most significant decline in trust over the course of a year in Consumer’s research.

In terms of real change and progress, Duffy notes one fishhook will be whether the Commerce Commission is adequately resourced to support the Grocery Commissioner and its new role under the legislation.

“Twelve of the commission’s recommendations are now complete or underway, including the ban on restrictive covenants and exclusivity covenants, and progress on mandatory unit pricing rules. The Government is acting quickly. For many shoppers, the question is – when will I see real change at the supermarkets? What we’re witnessing are the building blocks of a more competitive grocery sector and this will take time, perhaps even years.”