The Minister of Finance and Economic Growth, Hon Nicola Willis, made significant announcements about competition in the grocery sector.
The Government has announced a formal Request For Information (RFI) process to identify the necessary regulatory and legislative steps to encourage another competitor to enter New Zealand to deliver more effective competition in the grocery sector.
The Government has sought input from firms capable of providing a full range of grocery products nationwide. The goal is to understand the ideal conditions for new entrants or existing competitors to grow, including barriers and how the Government can improve conditions.
In addition, Minister Willis has announced that additional intervention options on market structure may be recommended later this year, considering evidence and options on whether a structural separation of existing entities in the grocery sectors is needed. If this includes new legislation, the Minister said this would be introduced before the end of the year.
Coriolis has been commissioned to provide specialist external advice to explore restructuring options, including the potential separation of existing brands and the impacts of such changes. Responses to the Request for Information (RFI) issued here today will inform this work.
The NZ Food & Grocery Council welcomed these announcements and commended Minister Willis for swift action since taking on the economic growth portfolio and grocery market regulation. The announcement indicated a carefully considered and designed course of action to explore options for addressing these complex market challenges.
The RFI process will proceed quickly, with information sought in the next six weeks. Work on market structure options will continue while this occurs, as will the Commerce Commission’s work to complete its wholesale inquiry, its analysis into land-banking issues, and its second grocery report.
The council found it encouraging that the Minister will actively lead the steps announced, with the clear intention and commitment to thoroughly investigate options and provide directional clarity in a relatively short time frame.
It looked forward to representing its members’ views throughout this process to ensure any options consider the impacts on suppliers and what is required for suppliers to have the confidence to invest and innovate.
The council also awaits the Commerce Commission’s release of draft reports on both the Code and Supply inquiry processes. These were due by the 31st of March 2025, but they will likely be later than this.
