Consumers will continue to pay some of the highest prices in the world to put food on their tables.
The Grocery Commission’s scathing review of the supermarket sector means that consumers will continue to pay some of the highest prices in the world to put food on their tables.
“The industry has had two years since the Commerce Commission’s market study and new rules to put matters right. Instead, we have increased consumer prices, exploitation of suppliers, high profitability and total market dominance by the duopoly of Foodstuffs and Woolworths,” said GAG chair Sue Chetwin.
The Grocery Action Group (GAG), formed to lower grocery prices, said that the Commissioner’s report has vindicated its position that much more needs to be done to ensure consumers and suppliers do not continue to suffer from an industry that puts prices ahead of fairness.
“In the towns and cities, consumers have been suffering because suppliers are not being paid as they should, there is no incentive for innovation, and some suppliers are ignoring the New Zealand market altogether in favour of export. That’s bad for all of us.”
GAG has urged the Government to support the Commission's call for increasing powers to ensure suppliers are treated fairly and the wholesale market operates as it should.
“But all of that is tinkering in a structurally failed market.”
GAG is concerned that despite significant court action against Foodstuffs for holding restrictive covenants on properties to stop rival supermarkets, the duopoly has continued to hold more than 100 properties not being used for supermarkets.
GAG will continue to push for more powers for the Commission to force the duopoly to sell some of its stores to rival operators.
“What will promote competition is more players acting competitively.”
Chetwin said that GAG would wholeheartedly welcome any moves by The Warehouse, Māori interests and others to set up shop, but the regulatory environment must improve before that can happen.
The Grocery Commissioner’s report has backed GAG’s view that consumers will continue to suffer at the checkout, and suppliers will continue to be at the mercy of two powerful operators.
“At the same time, the duopoly keeps making profits at their expense.”
