Ardern Takes Aim at Supermarket Prices

The retail grocery industry is agreeing that an investigation, as promised by Jacinda Ardern to make sure Kiwis aren’t being ripped off when buying groceries, is acceptable and there is nothing to hide.

“There is some evidence to suggest competition problems do exist in these markets,” said Ardern.

“Groceries are one of our most regular expenses, so we want to ensure the pricing is fair. We want to ensure the cost of living in New Zealand is fair and these market studies have the potential to help by providing the information we need to act."

Grocery manufacturers and suppliers agree saying that there are some trading matters that need to be addressed. The New Zealand Food & Grocery Council (FGC) told SupermarketNews they agreed with the proposed investigation.

“It will be positive for our industry, which (unfortunately for manufacturers) faces the most concentrated market in terms of supermarket ownership in the world,” commented CEO Katherine Rich.

“It would be valuable to make transparent the effects that such market power and the impact of the array of costs, rebates, deductions, claims, discounts, shelf auctions and supermarket margin expectations have on the final price. Also, one of the biggest impacts on grocery prices is GST, which is often forgotten.”

Rich noted that the FGC regularly deals with reports of additional demands being made at the store level.

“This announcement in itself should have an effect on some of the more questionable claims and demands being made of suppliers by stores who, from time to time, overstep the line between robust negotiation and bullying,” Rich concluded.

A spokesperson from Countdown expressed that the company works hard every day to make food as affordable as it can for its customers:

"The New Zealand grocery market is intensely competitive, and this can be seen by the huge array of choice that is available for customers - including supermarkets, specialty stores, fruit and vege shops, butchers, meal subscription services and more. We welcome the opportunity to demonstrate this in an open and transparent way and will cooperate fully with the Commerce Commission."

In a joint statement to SupermarketNews, Chris Quin, CEO of Foodstuffs North Island, and Steve Anderson, CEO of Foodstuffs South Island noted that it has been a huge year for New Zealand.

"We are extremely thankful to our customers, suppliers and our teams for all their support as we faced into the challenges of a global pandemic together.  As an industry, we have worked hard to make sure New Zealanders have been kept safe and have access to a constant supply of fresh, quality food."

"Now more than ever, we recognise Foodstuffs has a critical role to play in providing New Zealanders with their everyday grocery needs, providing strong value and choice as we adapt to our changing world and recover from the challenges COVID-19 has brought all of us."

"Our focus for some eighteen months has been a customer programme which puts shoppers first, enabling us to anticipate their future needs as we listen and respond to the wealth of insights they provide. This perfectly positions us to make sure our locally owned stores and online capabilities are in good shape to deliver for the future."

"We’re an industry that’s known for evolving and innovating and we’re proud to be a part of such a vibrant and ever-changing ecosystem that makes such a difference to New Zealanders lives.  We are, of course, fully open to a Commerce Commission market study that takes into consideration the retail grocery sector and we are committed to doing all we can to ensure any future study is effective for the future benefit of all New Zealanders."

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