Calls for structural reform of New Zealand’s supermarket sector have resurfaced.
The Grocery Action Group has questioned the delay in releasing a government-commissioned report examining whether the country’s dominant grocery operators should be required to divest parts of their businesses.
The group is seeking clarity from Grocery Minister Nicola Willis on the status of the investigation, which was commissioned last year to assess the feasibility, risks and potential consumer benefits of breaking up the supermarket duopoly.
“Early last year Minister Willis said she had asked the Ministry of Business, Innovation and Employment to look into what would be needed to require the supermarkets to divest themselves of perhaps half of their businesses, and what the benefits, costs and risks would be of doing so,” said Sue Chetwin, chair of the Grocery Action Group.
“She said this study would be reported back before Christmas last year, over a month ago. In the meantime all the steam with which Minister Willis introduced this plan seems to have evaporated.”
Chetwin noted that grocery prices continue to outpace headline inflation, rising at roughly four percent annually, a trend that keeps household budgets under sustained pressure despite broader signs of economic stabilisation.
“We know consumers would love to know what the Government has in mind to increase competition in the food and grocery area to rein in rising prices,” she said.
The group had previously welcomed the Minister’s acknowledgement that structural reform remained firmly on the table, but argues that the absence of further communication risks undermining confidence that meaningful change is forthcoming.
At the centre of the debate is the market dominance of Foodstuffs and Woolworths New Zealand, which together control more than 80 percent of the country’s grocery sector. Critics maintain that such concentration limits supplier access, narrows consumer choice and weakens price competition.
“We believe government and policymakers should recognise only bold, decisive structural reform, targeting both retail and wholesale, will deliver genuine relief to Kiwi consumers at the checkout,” Chetwin said.
While measures such as fast-track consenting and efforts to lower barriers for new entrants have been positioned as steps toward a more competitive landscape, the Grocery Action Group argues incremental change is unlikely to shift pricing dynamics at the pace consumers expect.
“Breaking up the entrenched duopoly and introducing competition is likely to be the single most effective course of action if New Zealanders are to see lower prices at the checkout, and see them quickly,” she said.
With cost-of-living pressures still shaping political and economic debate, the sector is now waiting for the Government to signal whether structural intervention remains a serious option or a policy idea losing momentum.
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