Scrutiny of the grocery sector focuses on delivering lower costs for households

Commerce and Consumer Affairs
  • Government continues to utilise market study reports to generate long term benefits for everyday Kiwis

Big supermarkets are being stopped from locking competitors out of prime locations, with restrictions having been removed from more than 140 pieces of land following Government action, Minister of Commerce and Consumer Affairs Duncan Webb says.

The Commerce (Grocery Sector Covenants) Amendment Act came into force in June 2022, which stopped supermarkets from restricting competitors to set up shop on nearby land.

“By removing these covenants, we’ve made it possible for competitors to use prime sites that they couldn’t before,” Duncan Webb said.

“It’s good progress on one of the many parts of the Government’s ongoing plan to increase competition and bring down prices for consumers.

“Today the Government is taking another stride towards these goals, with the third reading of the Grocery Industry Bill in the House today.

“When the Bill passes, the Government will move quickly to implement the changes. This includes announcing the start date of the Grocery Commissioner, which is expected very soon.

Government has already done the groundwork to enable changes to be implemented as soon as possible. This includes:

  • Requiring major grocery retailers to open wholesale offerings so other grocery retailers have direct access to a range of wholesale groceries at competitive prices
  • A Grocery Supply Code, currently open for feedback, to address the imbalance in power between retailers and suppliers
  • Reforms to encourage entry and expansion of grocery retailers into the market and protect suppliers from the negotiating advantage of the current market duopoly, which the new Grocery Commissioner will keep a close eye on
  • Establishing a dispute resolution scheme
  • Unit pricing, so people know what they’re paying for.

“In the long-term, consumers will benefit from more choice of where to shop for their groceries. Giving consumers the power of choice will push retailers to provide the best deals possible and bring new grocery services and products to the market.

“Cost of living is a central issue we’re focused on. We’ve used the knowledge gained from market studies to create meaningful change in the interest of Kiwis.

“It’s clear market studies work. Grocery competitors have entered the market and the two major chains have publicly announced that they’ve set up wholesale business units.

“Increased competition will take time. We’re establishing the conditions to ensure change happens," Duncan Webb said.