The Green Party is the latest to throw a policy into the ring to help with Kiwis’ pain at the supermarket checkout.
It has announced a new Member’s Bill aimed at banning price gouging by the supermarket duopoly.
New rules would aim to prohibit supermarkets from charging unreasonable prices that are excessive when compared to the cost of supplying groceries.
Breaches would carry penalties of up to $10 million, three times the value of the commercial gain, or 10% of turnover.
Green Party co-leader Chloe Swarbrick told The Front Page that the proposal is modelled on Australian legislation that came into force in July.
“Before market deregulation occurred here in Aotearoa New Zealand, we had very similar rules in place up until around the 1980s.
“At the end of the day, we have had politicians waving their hands around and talking about reining in the supermarket duopoly for several years now, but this is a piece of legislation that will actually give the Commerce Commission teeth to enforce the law against excessive price gouging,” she said.
A major criticism from Australian retail experts has been that there is no fixed threshold for what’s considered excessive pricing.
RMIT University behavioural economist Meg Elkins told SBS News that the law’s real test won’t be in court, but in the public’s gut.
“A retailer can clear the legal bar easily, for entirely legitimate reasons like a bad harvest or rising freight costs, and it will still feel like gouging at the checkout.”
When it comes to assessing what constitutes “excessive” or “unreasonable”, Swarbrick said it’d be judged on a case-by-case basis.
“What’s probably important to spell out here to people is that we’re not actually banning profit.
“But what the Commerce Commission has found is that the supermarket duopoly is currently making a million dollars a day in excess profit that is above and beyond what can be justified based on reasonable return.
“This is also where it’s important to understand how that fits in with the nature of the economic dynamics at play in terms of just how much market power the supermarket duopoly currently has.
“Food is not a luxury, so when you have so much market concentration, so much power being exerted by so few players, they can, with that capture of the market, effectively do that price gouging, which is reflected in a higher cost of living with higher grocery bills for New Zealanders,” she said.
The Bill, placed in the members’ ballot by MP Ricardo Menendez March, is part of the Green Party’s affordable kai election policy, which will be announced in full next month.
Listen to the full episode to hear more about:
- Grocery prices
- Wider reform
- Government-backed supermarkets.
The Front Page is a daily news podcast from the New Zealand Herald , available to listen to every weekday from 5pm. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
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