Foodstuffs North Island’s announcement it agrees with the establishment of a Grocery Code of Conduct is the first time it has acknowledged there is a serious problem with competition in the sector, said the New Zealand Food & Grocery Council.
“This is an epic flip-flop because they have repeatedly refused – at least three times that I can recall – to sign up to a Code or even acknowledge there are any problems at all in the sector," said Katherine Rich, Chief Executive, FGC.
“It’s also contrary to their assertions made in earlier submissions to the Commerce Commission that there is plenty of competition and no issues
“However, suppliers and manufacturers welcome it because we’ve been pushing for a Code of Conduct for many years.
“It seems Foodstuffs has now taken the very first step in the long walk towards a more competitive market, and it’s about time.
“It’s also very interesting timing, getting ahead of the final Commerce Commission findings even before it releases all the submissions. – but it’s a drop in the ocean in terms of change that’s needed to ensure genuine competition in the market and better treatment of grocery suppliers.
“We accept their explanation regarding the removal of restrictive covenants and exclusivity provisions in leases on land near its supermarkets, but that’s only baby steps towards fixing the structural problems that beset the sector – in particular, the broken wholesale market where many independent dairies and convenience stores have to purchase their stores at retail price.
“Many in the supplier community will wonder whether this is simply opportunistic public relations exercise ahead of the Commerce Commission’s consultation conference next week.
“The fact is, despite what the supermarkets say, suppliers have been bullied, intimidated and threatened with having products taken off shelves if they don’t accept tough terms and conditions demanded, and that has to stop.
“A mandatory Code of Conduct will do that," Rich concluded.
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