The Grocery Action Group (GAG) has requested transparency on the Commerce Commission’s latest deal with Foodstuffs over its anti-competitive land covenants on North Island.
“The public has a right to know just how much this has cost them over decades,” said Sue Chetwin, chair of GAG.
“It’s very likely consumers have paid several billions of dollars more than they should have at the checkout due to these anti-competitive land covenants.”
She agreed that it was great for the Commerce Commission to take this court action, but the agreement's terms must not be kept a dark secret since the public deserves and expects to know the size of the settlement undertakings.
The Commission was taking action against Foodstuffs North Island, alleging anti-competitive land covenants were used to block competitors from opening rival supermarkets in particular sites and developing existing ones at several sites across the lower North Island. It said the parties had settled to resolve the proceedings on terms acceptable to both parties.
“Any orders made by the High Court “in due course” about the land covenants, as announced by the Commission today, could well give Foodstuffs a licence to keep intact the gains they have already locked in.”
Chetwin added that the impact on consumers' wallets from these anti-competitive land covenants lasted at least 20 years. During that time, the supermarkets’ duopoly made excessive profits, according to the Commission's market report 2022.
“Even allowing for other factors, the cost to consumers from the lack of competition due to these land covenants alone could easily amount to several billions of dollars. We think consumers should know precisely how much these land covenants have cost them.”
GAG has also been suspicious about the timing of this announcement given that the Commission is due to say whether Foodstuffs North Island will be allowed to merge with Foodstuffs South Island this Friday.
“If the merger is allowed to proceed, Pak'nSave, New World, and Four Square supermarkets will gain even more market power, and consumers will lose out.”
