Grocery Action Group chairwoman Sue Chetwin told The Front Page that New Zealand’s supermarket sector is dominated by Woolworths and Foodstuffs, controlling about 82% of the market.
“Just to put that in some perspective, in Australia they complain about the fact that they have a duopoly of Coles and Woolworths, and between those two they have 60% of the market.
“We have one of the densest markets in the world, and that’s why we are paying some very high prices for our groceries.
“The Commerce Commission has been saying for years, and in its most recent report has said nothing has really changed despite all the new behavioural tools that they have been given in terms of codes and guidance, transparency, and fair trading,” she said.
Chetwin argues that the only effective fix would be to force supermarkets to sell off stores or parts of their operations.
“I think the only thing that can happen is that the Government needs to force the supermarkets to divest some of the stores that they own. They have tried everything else, and that is the last thing, the most difficult thing, that they really haven’t done.
“The Commerce Commission itself doesn’t have the tools to do that, so it either needs to get the tools or the Government does it.
“There’s no way, or I’d be very surprised if, a third operator looked at New Zealand, say an Aldi, which is the supermarket chain that is most often touted, is going to look at New Zealand and say, ‘Oh, look, there’s a duopoly that has 80% of the market. All of the best sites are taken. The duopoly owns the distribution centres. It owns the wholesale business. We’ll rush into New Zealand and over a period of years we’ll set up 150-200 supermarkets. Probably take forever to reach profitability.’ I mean, how attractive does that look?
“So the reality is that unless the Government does something, and it’s got to be more than making it easier for a third party to buy some land because all the best sites have been taken, nothing’s gonna change for Kiwi consumers,” she said.
Listen to the full episode to hear more about:
- The Costco model
- Telecom comparisons
- Political barriers
- Election-year proposals.
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.
You can follow the podcast at iHeartRadio , Apple Podcasts , Spotify or wherever you get your podcasts.
