Economic Growth Minister Nicola Willis said all options are available to deliver a better deal for supermarket shoppers.
Willis has issued a Request for Information (RFI) asking potential supermarket challengers in New Zealand and overseas what regulatory changes are needed to help them compete nationally and drive grocery prices down.
At the same time, she has asked officials for advice on reshaping the grocery sector to increase competition.
New Zealand grocery prices are high by international standards, and Kiwi shoppers are being poorly served by a market dominated by just two major players - Foodstuffs and Woolworths.
“This lack of competition is the result of a series of mergers over the past 30 or 40 years. Despite well-intended reforms in recent years, competition in the grocery market has not improved. Kiwis are still missing out on competitive grocery offerings,” said Willis.
“The purpose of the RFI is to identify the regulatory and legislative steps necessary to facilitate increased competition at scale. I am seeking information from a range of potential investors, on what it would take for one or more new grocery retailers to enter the market on a national scale, or for existing competitors to grow to sufficient size to materially increase competition.”
She has also requested to know what regulatory and commercial barriers to competing potential new entrants see and what they would like the Government to do about those barriers.
“I am concerned that more significant action may be required to foster genuine competition. Therefore, I have commissioned specialist external advice on ways in which the existing supermarket duopoly could be restructured to improve competition.”
Officials are working with the appointed advisors to consider options, including a possible demerger of existing entities. In mid-2025, once she has considered the evidence from the RFI and the Commission’s work, she will bring further recommendations to Cabinet.
“No decisions have been made yet, but if Cabinet decides legislation is necessary, I expect to introduce it to Parliament by the end of the year.”
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