A lesson in free market economics for ex-National MP, Katherine Rich

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Milo's Week Invisible Hand

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It seems that our Aussie cuzzies are taking matters in hand and implementing their own “Buy Local” policies. A few overly-zealous supermarket operators have even taken to removing New Zealand-made products from their shelves,

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TDB Recommends NewzEngine.com

Supermarket stoush sours CER

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According to Tracy Watkins’ story in the Dominion Post, Key will raise the problem when he meets Australian PM, Tony Abbott in Sydney, later this week.

Raise what, precisely?

This is capitalism/free market/whatever at work. Supermarket owners can stock whatever goods they like. If an owner took it upon him/herself to stock goods only from Outer Mongolia – that’s his/her call in a free market.

In fact, like the Scottish Shop in Dunedin, some retailers are very specific in what they stock.

Food and Grocery council CEO,  Katherine Rich, complains that this policy “undermined the spirit of CER and risked a backlash in New Zealand as well”,

‘‘It’s an issue we’re watching closely because both major supermarkets, Coles and Woolworths, have come out with a very pro-Australia stance. There have been some high profile delistings of some New Zealand brands for no other reason than that they are not Australian.’’

Which is supremely ironic as Ms Rich was a one time member and National Party minister from 1999 to 2008.

So she should know how the free market, capitalist system works. It’s a bit too late in the day to start whinging that another nation’s private companies have adopted their own, specific retail policies.

After all, this is something the “invisible hand of the free market” will work out. According to neo-liberal dogma, if consumers want to purchase New Zealand goods, they will go elsewhere, to other retailers. Or buy via the internet. Or hop on a flight to do their grocery shopping here in New Zealand, at a Pak N Save.

That is how the Free Market works, right?

In fact, as Ms Watkins correctly reported, CER binds governments – not private companies;

One option would be for the Government to lodge a formal objection but sources say the situation is complicated by the fact that CER is a government-to-government agreement, and it is not ‘‘straight forward’’ whether supermarkets are captured by that process.

Very astute.

After all, wouldn’t it be a form of “communism” to bind private companies to buy certain goods?!

On the other hand, free trade agreements such as the CER, or the China-NZ FTA, or the impending TPPA, do bind governments in the way they must  purchase goods and services.

A New Zealand government wanting to implement a procurement policy that favours locally produced goods and/or services would immediatly be sued by other nations or foreign corporations, via the World Trade Organisation. (In fact, New Zealand sued Australia at the WTO, over the latter’s refusal to allow New Zealand applies into that country. We won.)

So free trade agreements bind governments – but not private companies (those Kiwi apples can be exported to Australia – but no law can force an Aussie retailer or chain-stores to stock them).

This is something that New Zealanders might consider as the issue of the TPPA nears resolution; signatory governments – like our government – would be bound by a TPPA. But private companies would not (or only in peripheral ways) be bound.

As for Katherine Rich?

Tough luck, lady. This is the capitalist system at work.

Suck it up.

Welcome to  the corporatisation of human civilisation.

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References

TV1: Sweet success after bitter battle over NZ apples

Fairfax media: Supermarket stoush sours CER

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Why I am a Leftie

Above image acknowledgment: Francis Owen

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15 COMMENTS

  1. DIck Smith has his own brands in Oz, with a big selling point, and 100% of the advertising, being about how they are true blue. He uses different advertising in Aotearoa.
    I don’t care a hell of a lot where the stuff I buy comes from, but a lot of the Aussie food is pretty tasteless, from tinned fruit right through to cheese and lamb. Given the choice, and near equality of prices, the Kiwi stuff would outsell them every time.

  2. Oh bugger! Coles Date and Almond Natural Muesli (produced in NZ) is the only thing that makes waking up in the morning bearable in 35 degrees plus!
    Seriously though – its about time nations took back the control of their food supplies from a handful of supermarket chains. The abusive power of supermarkets over their suppliers is well known. It not good for our long term survival, is ultimately unsustainable, and in the end results in the sale of junk food at enormous profit.
    But it will not be easy. When the UK govt tried to bring supermarkets to heal in the early terms of the Blair govt – it all turned to custard. Walmart suddenly acquired a foot hold where previously they had been denied entry; prices dropped and even more junk food arrived – problem “solved”.

    • I already do, but I do notice in places where there is little room for competition that it is Countdown you mainly will find there. I am currently in Katikati for a few more days and that is the only supermarket here. They have a large footprint in NZ do Countdown.
      At least here there is a wonderful fruit and veg shop just a bit further along the road so I don’t have to touch their overpriced fruit and veg.

      Anyone in the Bay of Plenty should go look at the Growlink site

      I say boycott Bunnings as well, go on the front foot with this NZ, after all how many NZ hardware and supermarket chains are in Oz.
      Buggar them

  3. The point is that all exporters to Oz want is for our goods to be at least considered – not to be automatically discriminated against just because they come from NZ. That’s what Rich is saying and that’s fair. The Ozzies are discrimating full stop.

  4. Our local IGA in Toodyay WA has just started stocking and selling Griffins biscuits – the ginger nuts go in a flash! Who’d buy the Arnotts crap! Now if they could just get some Black Doris Plums in…….

    • Aye Black Doris – now there be a plum! Just finished making BD jam from Mainland/Te Waipounamu local produce and eating the left overs. NZ grown and homemade – waytogo.

    • @ JonL – and have you noticed how Arnott’s pack their bikkies? The spacing between each biscuit must take up at least one third of the packet!!!

      Mmmmm… ginnngerrrnuts… [in best Homer Simpson imitation voice]

  5. Either way, JK will get fobbed off for two reasons. He couldn’t negotiate his way out of a paper bag. The only deal he can make is one where the other party gets almost everything they want. B) Abbot makes Key look like a reasonably pleasant person in comparison.

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