Consumer NZ has called for stronger action in New Zealand following the ACCC supermarket report, particularly on pricing and promotional practices.
The Australian Competition and Consumer Commission’s (ACCC's) inquiry into the Australian supermarket sector has led to 20 key recommendations aimed at improving competition, pricing transparency and fairness in the supermarket sector.
Consumer NZ has urged the New Zealand government and regulators to take note.
“We continue to see significant issues in New Zealand’s supermarket sector. With fewer players in the market, our situation is, in many ways, worse than Australia’s, meaning we need a stronger response to address the issues shoppers face,” said Consumer NZ chief executive Jon Duffy.
“It's been more than three years since the Commerce Commission's market study into the grocery sector in New Zealand, and while we've seen some action, including the appointment of a Grocery Commissioner and the introduction of a grocery code of conduct, as yet, there's been no meaningful improvements for shoppers.”
Duffy said the Commission told supermarkets to sort their pricing and promotional practices. However, this seemed more like a feather than a stick as New Zealanders lose tens of millions of dollars to pricing errors annually.
“Recommendations alone haven’t been practical, and, while the Commission is prosecuting some supermarkets and investigating others, given the low level of fines the courts can impose, further regulation might be the only way forward.”
The Consumer's Sentiment Tracker survey has revealed that the cost of food and groceries remains a top financial concern for New Zealanders.
“The ACCC report pointed to the need for rigorous reforms, many of which would benefit New Zealand consumers if adopted here.”
New Zealand’s Commerce Commission recommendations:
- Grocery retailers should ensure their pricing and promotional practices are simple and easy to understand.
- Grocery retailers should cooperate with price comparison services.
- Develop a mandatory grocery code of conduct to govern relationships between grocery retailers and suppliers. (The Commission has since said this code isn’t working as intended.)
- Improve the availability of sites for retail grocery stores under planning laws, with parliament introducing the Commerce (Grocery Sector Covenants) Amendment Act, which prohibits anti-competitive land covenants.
The Commission has not recommended a review of loyalty programmes. Instead, it recommended that supermarkets ensure clear and transparent disclosure relating to loyalty programmes, data collection, and use practices.
Consumer NZ’s research into supermarket loyalty schemes has shown that 84 percent of New Zealanders use loyalty cards, but ‘specials’ and discounts don’t always reflect the lowest prices available at the check-out.
The ACCC report stated it took the German multinational discount supermarket chain Aldi more than 20 years to gain its current Australian market share of 9 percent.
“We are at a crucial point where more must be done to tackle the structural and systemic issues in our supermarket sector. Consumers are facing persistently high prices, and the ACCC report shows that, without additional regulation, a third entrant in the grocery sector is not the silver bullet it is often presented as.”
Consumer NZ has urged stronger regulation and enforcement to address ongoing concerns around supermarket pricing and market power in New Zealand.
