Another step towards improved supermarket competition
The Bill to trigger an unprecedented shake-up of the grocery sector and deliver New Zealanders a fairer deal at the checkout and help tackle cost of living pressures is ready for its first reading at Parliament.
“The duopoly has now been given plenty of warning. If they fail to adequately open up their wholesale market voluntarily, government will make it happen,” Minister of Commerce and Consumer Affairs, David Clark said.
“The Commerce Commission found New Zealand supermarkets earn $1 million a day in excess profits because of a lack of competition. As the global cost of living crisis continues to put pressure on families, this Bill is one way Government can tackle the root causes.
“Alongside their retail stores, supermarkets have behind the scenes wholesale operations. Earlier this year, I called on the duopoly to lock in good-faith wholesale arrangements on their own terms or risk facing regulatory intervention.
“Our plan will give a leg up to the likes of smaller retailers and new market entrants. It also means other retailers will be able to source and sell a wider range of groceries at better prices.
“If the duopoly fails to reach commercial deals, or those deals are not what we would expect in a competitive wholesale market, the Grocery Commissioner will be able to impose additional regulation and require the major retailers to provide wholesale supply on certain terms, including price and range.
“The Grocery Industry Competition Bill will legally establish a Grocery Commissioner at the Commerce Commission, to referee the sector.
“The Commission will play a key role in administering the Bill once it is passed and will have access to a hefty range of enforcement and monitoring tools. The Grocery Commissioner’s, sole focus will be to keep a close eye on how the Government’s reforms are being implemented.
“The Bill will also enable collective bargaining and implement a Grocery Supply Code to protect suppliers from unfair contract terms. This will be especially important for the small local and artisan brands vying for shelf space.
“Also included in the legislation is a dispute resolution scheme for suppliers and wholesale customers of the duopoly,” David Clark said.
The Grocery Industry Competition Bill will be introduced under urgency and will be open to feedback for four months through the Select Committee process, with a view for it being in effect in mid-2023.