A government announcement expected this week on the prospects for a new supermarket chain is extremely positive, according to Sue Chetwin, chair of the Grocery Action Group (GAG).
“It’s great to see the Minister for Groceries Nicola Willis so quick off the mark with her new portfolio,” said Chetwin.
“Kiwis are paying some of the highest prices in the world for groceries and would welcome the sort of competition to the duopoly of Woolworths and Foodstuffs that will bring down prices.”
She added that GAG was particularly interested in hearing what it would take to get a new large supermarket chain open for business as that would be the only realistic option to break up the current duopoly.
Doing that would require Foodstuffs and Woolworths to divest part of their operations to a third, entirely separate player.
“Simply rolling away the red tape won’t be enough.”
Chetwin provided the example of Aldi’s 20-year journey in Australia, which has shown how long it can take for a new entrant to get up and make any helpful headway in restraining grocery price rises. Aldi still has less than 10 percent of the market in Australia.
“We already have good experience to draw upon from the break-up of our telecommunications market in the 2000’s. Similarly, supermarkets should be required to sell off part of their operations to get early competition underway.”
Four Square stores, Pak’nSave and New World, under separate ownership, could form the basis of a competing chain. The Grocery Action Group supports any action that would bring fair prices for food for Kiwi consumers.
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