The remarkable public and political acceptance of the CommerceCommission's damning report about market dominance showed that people already knew what it concluded. There are massive competition issues in the supermarket sector, and we are all paying far too much for groceries. Even the most right-wing politicians wisely kept their powder dry – they know action is essential.
However, the emergence of Tex Edwards – founder of 2degrees and monopoly-buster extraordinaire – as the apparent lead for a consortium of potential investors in a third supermarket chain adds a whole new dimension. The prospect of a third operator is no longer hypothetical. We have a name, a face, and a game plan. The proposed new business, Northelia, says it can unlock a billion dollars of capital investment, provided, of course, that the Commission and the government do the right thing.
If it were anyone else promising to bring along a billion bucks, I'd be sceptical. But Tex has form, and I believe he will pull it off.
It just requires the Commerce Commission and government to hold their nerve and make the necessary rules.
Tex started work in the seventies in Countdown, Howick. For four years, he fetched trolleys, packed groceries, filled shelves and mopped floors. He went on to set up a painting business. Then he moved into finance, first in Auckland and then in London, where he held very senior roles as a foreign exchange trader, head of credit risk, frontier markets equity analyst, and more, eventually in South Africa. Think Sir John Key. That's quite a CV for a former trolley boy.
In 2000 he returned from South Africa. He used his international finance nous and contacts to connect a cellphone company in Zimbabwe with a Maori trust in New Zealand, then set up the company, which eventually launched as 2degrees. It took ten years.
I was there on day one – I saw the setbacks, the agony, and the granny steps forward, but Tex stayed the course. He won. So did Kiwis.
Tex is a monopoly-buster. He understands intricate competition law, the behaviours of companies with excessive market power, and the dynamics of competition than anyone else I've met. His passion for making sure ordinary people get a fair go is utterly genuine. He understands the supermarket sector literally from the floor up, and there's a tremendous job to be done.
Experts have said much of the difference between grocery prices in New Zealand and Australia. Yet, there are many other countries where the disparities are even starker. I learned in telecommunications that the useful comparators for us are the northern European countries of comparable size. Denmark, Sweden and Norway are around our population, but each has four or more supermarket chains. Australia is a poor comparator because it's a lot bigger than us and is not as good at some things. Even now, it's still trying to get a national broadband network going, which we effectively finished years ago.
But back to Tex. He will undoubtedly bring a certain flamboyance and colour to the debate. His communication style is very distinctive. Sometimes we'll wonder what he is getting at, but it will become apparent in time.
Minister David Clark will make the big call on all this early next year. Will he have the courage that David Cunliffe exhibited in 2007 when he forced the breakup of Telecom? Like Cunliffe, Clark's political career will be a make or break on the results. Kiwis, especially those on low incomes, have a lot at stake.
One more secret. Tex is not his real name; it's Simon. I don't know where the nickname "Tex" comes from, but I'd hazard a guess. Perhaps short for "tenacious."
That one word sums Tex up brilliantly.
Go Tex/tenacious - see you at the checkout on opening day.
Columnist: Ernie Newman is a Waikato-based consultant who worked as a lobbyist in the telecommunications industry in the 2000s when he was at the heart of the campaign for more competition and the grocery industry in the 1980s. He advises many clients, including the Food and Grocery Council. The views in this article are entirely his own.