There are tens of thousands of New Zealanders involved in food production and millions of us are food consumers. Yet between the large numbers of producers and even larger numbers of consumers is a narrow bottleneck of just two companies – Foodstuffs and Countdown – which control the supply, and the price of our food.
Yes, we have farmers’ markets and some small independent food retailing companies but these are niche food suppliers. The vast bulk of food consumed in Aotearoa New Zealand passes through the grasping hands of just two food companies which, incidentally, use every means available to them to keep out competitors. Why wouldn’t they?
These two profit-hungry corporates control food pricing at every step. They decide what price they will pay suppliers of food and what price they will charge us to buy the food. Don’t think for a moment these prices are negotiable. The supermarkets decide how much they will pay suppliers, and when they will pay them, and there is no way they would tolerate any customer trying to negotiate their grocery bill at the checkout. Total control of pricing at each stage lies with the supermarket duo.
In theory, because there are two companies competing, those magical “market forces” we hear so much about should be keeping prices under control but the so-called market is almost a complete fiction.
Human beings are creatures of habit. Only a miniscule number of people will examine prices across supermarkets before they go grocery shopping. We fall into habits of shopping when it’s convenient for us – fitting it into our day on the way to and from work or at times in the week most convenient for us. Human nature means we will never be the rational beings in the fairytale free markets of neo-liberal economists.
Human behaviour and the rapacious behaviour of the corporate food giants mean that for all practical purposes we are the hapless victims in the hands of a ruthless, two-headed corporate cartel.
Government attempts to regulate food supply and food prices are woeful. Treasury says we could chop billions off our food bills by forcing the supermarket giants to sell part of their businesses to allow a third company to enter the market and so increase competition. I think this is wrong headed. How long would it be before we are being screwed by a cartel of three companies rather than the double headed hydra we face at the moment?
The government should step into the bottleneck space between producers and consumers and nationalise the supermarket chains. Why should food, an essential for life itself, be left in the hands of private corporate profiteers?
Leaving it to the supermarkets and “light-handed regulation” has got us to the point where only drastic action can get the changes we need. And for those of you who think this might be a step too far, ask someone struggling to put food on the table if they are happy for corporate investors to be fleecing them every time they walk through a supermarket door.
And on a related note there were protests against our supermarket giants across the country yesterday and while I was unable to attend the Christchurch protest, I’m told that of all the signs out on Moorhouse Avenue the most “toots of support” were not for placards calling for affordable food but for a large placard saying “Tax Corporate Profits”.
Amen to that.
While I have not been to Australia for many years now I would have thought that Aldi was a good example of competition helping lower food prices although their larger population obviously helps. While nationalisation of the existing stores might seem wise I suspect that the same public service attitude that destroys social services would also arise so you would get food unsuitable for consumption, 9 am to 4 pm shopping hours on 4 days a week only, etc.
I think the initial cut aldi caused opening in oz was about 12percent…but that’s from memory
When I lived in North Sydney I went into Aldi a couple of times. It was pretty mediocre “own brand” fare with products in cardboard boxes like Pak-n-Save over here in the old days. I preferred to shop at Coles and Woolies as they had a better range of products at reasonable prices.
The problem we have in NZ due, in part, to weather events and supply chain disruptions is a much more limited range of products at unreasonable prices.
congratulations on understanding aldis basic business model fred..take it from me the selection in NZ supermarkets is very far from extensive….did you try any of aldis europian products?? far higher standard that anything in NZ and yes I worked in oz for a while and shopped at what I belive was thye 1st aldi over there in melbourne
Nothing wrong with Aldi… but you guys realise Coles and Woolworth’s are still blocking new entrants to the market, right? Because they were never broken up.
Kaufland just gave up on entering the market. Before that the Walton family also gave up, and Lidl never really tried. Costco are only a minor player. And regulators allowed Safeway, Franklin’s, Foodland/Action, and Bi-Lo to all be bought out by the existing majors.
Tax the wealthy that will help alleviate ordinary peoples suffering. Find alternatives like the small businesses that sell food at a fraction of what these giant grocery stores offer, change your diet get off the sugar rush junk food, grow your own veggies etc..
Nice thought on growing your own. But they’re forcing everyone onto terrace housing whose yards non existent.
change your diet get off the sugar rush junk food, grow your own veggies etc..
Please Stephen don’t lecture people. For many these things are just not possible.
I have been a vege grower for 50 years. Last year my beetroot didn’t come to anything, nor my carrots. I will of course continue but I can understand some people’s disappointment when they actually have the time and the room to grow veges!
http://www.ketokiwis.com
I am happy for corporate investors to be fleecing me every time I walk through a supermarket door.
The very best of the nationalised retail foodmarkets are in Cuba.
New Zealanders just wouldn’t tolerate the beauracratic difficulties involved in accessing cheap food.
but WE DON’T HAVE CHEAP FOOD do we scott?
” I am happy for corporate investors to be fleecing me every time I walk through a supermarket door. ”
Its people like you that make this country a rich mans paradise.
By the way you think and I bet the way you vote.
Just as well we have food banks eh Scott its the only cheap food you will find anywhere …take a look sometime and see what corporate extortion has done to what was once a human right ..to afford to feed yourself.
Dear Mr Scott…
Last week, Labour chickenshitted out on a wealth tax, with Prime Minister (for now) Chris Hipkins ruling it out as long as he holds office (which sortof suggests a solution, doesn’t it?) But taxing wealth to build a more equal Aotearoa wasn’t the only thing they chickenshitted out on – they also refused to break up the rapacious supermarket duopoly which is robbing us blind. Why? Largely it seems because they’d get the blame if it went wrong, and so they’d rather let Foodstuffs and Progressive keep screwing us than do anything about it. And today, there’s the icing on the cake: a consultants report advising that the government’s current half-measures are ineffective and will condemn us to another 20 years of supermarket robbery:
http://norightturn.blogspot.com/2023/07/the-government-of-doing-nothing.html
Rather than nationalisation I’d like to see the government capitalise a cooperative alternative. The biggest supermarket chain in Italy is owned by its consumers. Similar chains exist throughout Europe. If a cooperative chain finds itself making excess profits at the end of the financial year the money is returned to customers based on their annual spend.
Covered municipal markets like those in Melbourne, Barcelona etc would also be good. The weekly farmers markets could become a daily thing. There is real competition with multiple stalls selling, say, olives and bread.
We did use to have food co operatives in Hawkes Bay Jeremy, about 50 yrs ago. The customers were shareholders and got a rebate according to profit. I don’t know who ran them but they were swallowed up by the big players. If the government ran it for minimal profit it would have to be really efficient!!!
The big payers make big money but a lot of that profit comes from quantity and NZ isn’t a big market place. If the government ended up subsidising the food the tax payer pays.
We also had councils running milk delivery operations until about 30 years ago. Most notably, Wellington council’s milk service.
Fantastic stuff Jeremy, lets do this… oh no that was the neo liberal labour government’s slogan some while back.
So our food supply will be as high quality and reliable as our health system, the universities, polytechnics, and the Cook Strait ferries?
yup ada that’s privatisation and the free market for you….chaos cost and disaster
None of those are privately owned or managed.
I mean they all seemed to run considerably better prior to the government telling the Managing Directors to pretend they were corporate raiders that had to asset strip everything? Although admittedly the funding did used to be much better.
ada the health system is partly under the table privatised, the wellington to picton ferry is privatised(they buy old 2nd hand rust buckets)…the polys are expected to operate like private business none of them NONE have a public service ethic
Ha! None of them are run like private businesses, without ministerial interference, and all are hamstrung by multiple policy objectives accumulated from this and past governments.
Their staffing is public sector unionised. Their capital investments are heavily constrained by the Finance Minister’s requirements to make the books look good.
Don’t ever believe that public sector ownership or management is some kind of magic ticket to excellent service at a cost-effective price.
It looks like The Warehouse is slowly but surely moving into to grocery shopping.
It might make more sense to assist them to become a full fledge supermarket chain.
Yes The Warehouse has the real estate already and I hope it still is NZ owned and runs a good business.
Regulation of monopolies in local retail appears to be woeful in general.
Why haven’t James Pascoe’s been forced to sell stores, when they have a near-monopoly on department stores (running out of town the far superior David Jones, Myer’s and H.J. Smith’s), and have also nearly destroyed all their competitors in the bookselling business (Dymocks, W.H. Smith)?
How about the department discounters? Woolworths’ had to give up on local branches of the Big W variety division, as did other competitors, because nobody dares to break up Tindall’s Warehouse Group (who have limited the expansion of even Wesfarmers, the other half of the duopoly).
And why were Ampol-Caltex allowed to gobble up the Royal Dutch Shell retail branches, and briefly even the Puma-Gull gas stations as well?
We have to be easy, the best in the world for easily setting up businesses, minimum regulation. Doggies with tongues hanging out for big money to come into NZ supposedly to start, improve, enhance, boost new business. Talk about the Beauty and the Beast fairy story. And we trust these people in top positions who are supposed to be working for the good of the country. Funny how many of the management come from overseas or have been to Harvard etc.
What we know is so little, and what we know we don’t know the same, and then there is the rest of info that is accessable that we don’t bother to find out, have no time to find out, or get to understand the ways and means, and then there is the secret stuff and the stuff in jargon or other languages. Oh just give up we are surrounded, let’s go out and shoot someone? Is that how the system operates?
we had our chance with aldi but the duopolies brown envelopes sunk that…nationalised and iwi chains are a none starter but we will have shiney new woolworths signage
Ha! Try being a wool farmer and being given, take it or leave it .70 cents a kg for wool then seeing socks for $38.00 a pair or Merino wool fashion clothing for hundreds, if not thousands, an item.
Check out L.D Nathan. Know your enemy.
https://natlib.govt.nz/records/22440409
If you are selling Merino wool for 70 cents/Kg you need to find a new buyer. Value added has been talked about since I was a boy (over 50 years ago) but farmers are so full of the National party who bend over & say how high whenever big business asks them to jump that they have lost the ability to work together for their common good. They can unite to keep the existing scam going but can’t see that a better system is possible.
http://www.ketokiwis.com. Beat the Rich Sugar Saturated ” sellers of junk
food”
Bugger me with burn broom stick – two things I agree with John on – state housing and the supermarket friendship.
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