Is this Start-Up the Supermarket Competition Solution?

Interesting to see the release of information about Greenfields institutional start-up Northelia Ver 1.4.

According to their website, this group of experienced DIB (done it before) operating entrepreneurs have worked in the supermarket industry. They have noted with interest the Commerce Commission's determination to create a proper competitive three or five-player New Zealand supermarket playing field.

Northelia is submitting in stealth because its executive, investors and board need day jobs; however, Northelia is open to confidential discussions with Government, ComCom, MBIE and Productivity Commission. A once-in-generation private sector initiative to bring New Zealand-owned grocery competition for kiwi consumers and suppliers.

Northelia compliments the Commission for its draft 517-page report, claiming that it is one of the most comprehensive reports of the last 20 years. Noteworthy of this submission is that today's problems in competition stem from a ridiculous decision in the early 2000s to allow Foodtown to merge with Countdown. Ironically Foodstuffs complained at the time to suggest that it would fracture competition and would cause downstream problems.

According to Northelia, the Commission's report missed a vital point. Today there is massive competition in supermarkets – there is a competition to own them. Foodstuffs run an internal process that illustrates new franchisees' prices for a food distribution business with monopoly features attached via a co-op model.

Who doesn't want to own a supermarket?

Northelia's summary submission in one sentence:

“We will deliver a new like for like supermarket chain, with independent competing open access wholesaler, an NZ controlled and owned facility  with world-class technology, leveraging franchise and owned stores confronting the benign and clubhouse noise from the current monopolist incumbents;, this Greenfield institutional start-up will mobilise a capital base in excess of $1bn “

The Northelia submission focuses on the process to harness this appetite for supermarkets and channel it into something that fights for fair - for both consumers and suppliers.

Read the Research Report prepared for Monopoly Watch NZ here