Finance Minister Nicola Willis' speech on getting a third major supermarket competitor was welcomed by the Grocery Action Group.
Sue Chetwin, chair of the Grocery Action Group (GAG), said this was long overdue, and they would be watching closely to see when and how the minister’s words become action.
“Nevertheless this is the first plain indication the government is prepared to act over the lack of competition in the supermarket sector, but just tackling red tape may not be enough,” said Chetwin.
“We need a clear indication that the government is prepared to create new regulations should today’s message show inadequate results.”
Chetwin added that land banking by the supermarket duopoly has long held up competition, and the least that should be required is that the supermarket duopoly divest themselves of land and buildings they own and do not use.
Preferably, and similarly to how the telecommunications market was freed up in the 2000s, the supermarkets should be required to divest themselves of part of their operations to achieve early competition. For example, the Four Square stores under separate ownership could form the basis of a competing chain.
“The backdrop to this is, of course, that several studies have confirmed Kiwis pay nearly the highest prices in the world for food and groceries.”
Besides, the lack of competition has been stifling innovation, which New Zealand food and grocery businesses depend on for their long-term growth.
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