Government set to require Countdown and Foodstuffs to supply rival retailers
The Government is expected to announce on Wednesday that it will press ahead with a law change that will force supermarket groups Countdown and Foodstuffs to supply wholesale groceries to rival retailers.
Prime Minister Jacinda Ardern said the announcement would be “a big and important step ensuring New Zealanders and their families get a fair deal at the tills and this country’s grocery sector is effective and operates fairly”.
The “regulatory backstop” would be the latest in a series of government interventions designed to improve competition in the industry and get a better deal for supermarket suppliers.
It would be likely to kick in if the Government assessed that Countdown and Foodstuffs weren’t making sufficient efforts to wholesale groceries to rivals off their own bat.
That whiff of desperation you smell here is a Government realising that the cost of Living Crisis is killing them politically.
The spineless gutless Labour Government wouldn’t step up and actually take a 30% stake and run our own supermarket player to force actual competition and food security AS ADVISED BY THE COMMERCE COMMISSION, preferring to do the age old meaninglessness masquerading as tweaks and first good step crap.
To be fair to David Clark, the measures being forced here are structures that at any other time would enable downward price pressures.
Ending the obvious abuses of power like land covenants is good, as is the ability for local supermarkets to rebrand so a 3rd player can enter the market, and most importantly allowing competitors like smaller dairies and minimarts, butchers and grocers the ability to buy at the same wholesale price is another structural feature that will push prices down.
HOWEVER
These aren’t normal times!
Government after Government have allowed the Supermarket Duopoly to grow out of control so these basic regulatory features which should have been implemented decades ago, simply won’t be enough to stem the pain of food inflation!
It suggests that the Government are slowly realising that the Treasury’s predictions of the inflationary spike to be temporary are optimistic in the extreme and that come December when Putin is strangling Europe with Gas cuts, inflationary pressures will erupt.
Labour better be looking to be on the road to achieving some price relief at the supermarkets by December or they will be gone at the Ballot Box the following year.
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Prime Minister Ardern is correct. This law change is indeed a big important step in the government’s bid to ensure fairness across the supermarket sector. For far too long now, this supermarket duopoly has been allowed free reign over the control of retail grocery prices. This has always posed a direct conflict of interest as they have a vested interest in making as much profit as possible. I’m glad that the government is now implementing this law change as it will enable fairer prices for goods at retail counters.
Yes Dan, brilliant to see this government attempting to create an equitable environment for ALL shoppers. Nact could learn a thing or too, given their free market thinking allowed supermarket prices to get out of control.
Any sign of the Commerce Commission getting a rark-up and a reminder about the benefits of competition?
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