Forcing the supermarket duopoly to negotiate wholesale offerings to competitors on commercial terms is a significant but necessary step if Kiwis are to see better choice and lower prices, says the New Zealand Food & Grocery Council.
“This plan by the Government to inject more competition into the grocery market is a further step in a suite of changes that will help reduce pain at the checkout,” says Chief Executive Katherine Rich.
“Together with earlier announcements of a Grocery Code of Conduct, a Grocery Commissioner, and legislation to end anti-competitive land wars blocking competitors, this will help fix the grocery market.
“It’s great the Government has accepted the wholesale market is broken.
“Shoppers can see that every day when they see small retailers lining up at supermarkets to get groceries for their store.
“They do that because they have nowhere else to buy wholesale goods at reasonable prices.
“That’s the very reason dairies and retailers such as Night ‘n Day and Supie are not competitive on pricing because what they’re paying for their goods is the same as shoppers at supermarkets pay.
“In the past, the big supermarkets have declined requests from some independent retailers seeking wholesale supply.
“This will change that, and the Grocery Commissioner will play a key role in implementation and scrutiny.
“In a well-functioning and competitive wholesale market these steps by the Government wouldn’t be needed, and it’s just further proof of how broken and uncompetitive the grocery market is right now.
“But what we do need in the long term is an independent wholesaler and other independent retailers to enter the market.”