Foodstuffs '10 points' fail to show their proposed merger would lower supermarket prices.
A 10-point list published by Foodstuffs cites value for customers if their North and South Island operations are able to merge flies in the face of research, which shows they are making excessive profits. At the same time, Kiwis pay some of the highest prices for food in the world, according to GAG chair Sue Chetwin.
The Grocery Action Group (GAG) said not one of the "10 things" Foodstuffs has published on a social media site provides any evidence of how its application to merge its North and South Island stores would lower the price of groceries for ordinary consumers.
"The 10-points ignore the fact that between them, Woolworths and Foodstuffs control more than 80 percent of the supermarket trade and that Kiwi consumers are paying well over the odds for food and groceries. The 10-points seem more like an effort to pile on the pressure for the Commerce Commission to allow the merger," said Chetwin.
GAG strongly opposes it, believing it would significantly reduce competition in a market with little existing competition.
"In Australia, where two supermarkets enjoy 65 percent of the market, a Senate inquiry there recently recommended allowing its regulator to order divestment of stores if that would help competition."
GAG strongly believes the Government should be looking at similar tools here for the regulator.
"The Foodstuffs 10-points on LinkedIn seems designed to get the backing of its 43,000 staff and suppliers while ordinary consumers pay the bill."
Foodstuffs also claim that the mandatory Grocery Supply Code, which came into force in March this year and provided for the duopolists to deal fairly with suppliers, will lower prices to consumers.
"Foodstuffs don't seem to see the irony of the fact they had to be dragged kicking and screaming to accept the Code, but are now citing it as a way for consumers to get better prices," said Chetwin.
"The 10-points offer nothing new. Consumers will continue to pay high prices if this failed market is not further regulated," concluded Chetwin.
Read more from GAG here.
