Prime Minister Jacinda Ardern and Consumer Affairs Minister David Clark are giving further details on the supermarket reforms.
RNZ understands the announcement will be around requirements for Countdown and Foodstuffs to open their wholesale operations to smaller rivals.
The Commerce Commission made a number of recommendations after investigating the supermarket sector.
Its final report into the $22 billion sector in March said competition in the industry was not working well for New Zealanders, with supermarkets making about $1 million a day in excess profits.
Commerce Commission chair Anna Rawlings said while there was a growing fringe of other competitors in the sector, they were unable to compete effectively with the big two on price, product range or store location.
The government confirmed in May it had accepted all 12 of the commission's recommendations and planned to go further in respect to two of them.
Last month, Clark confirmed a code of conduct and establishing a Grocery Commissioner with the ability to fine supermarkets that breach it would be part of the reforms.
9 comments
Farce
Posted on 24-08-2022 19:50 | By an_alias
More govt sector jobs is not a solution, thats just a govt kick back system. All parties allowed this du-opoly and are at fault. Competition is needed not a bigger govt sector
Interesting
Posted on 24-08-2022 20:36 | By Kancho
I can't think of any government meddling with market forces actually achieving anything or ending well. Certainly it will grow civil servants in the payroll and a bureaucracy to try and enforce. We shall see but I don't expect to see any difference.
Excellent comments...
Posted on 25-08-2022 18:26 | By morepork
...from an_alias and Kancho. Certainly, more civil servants won't help, and, as Kancho noted, meddling with market forces is never a good idea. The trouble is that this market has been cornered by 2 companies, and a cornered market is not a good idea (for the customers) either. There needs to be severe mandatory limit on profits for the 2, while new players are allowed entry and time to get a base. Suppliers and sources must be backed and allowed to supply ALL players. It might seem harsh on the big 2, but they have brought it on themselves through their own greed. I seriously doubt that this government will have the will or ability to do what's needed anyway...
@ morepork
Posted on 26-08-2022 12:49 | By Kancho
I don't think profit is a bad word and excessive is matter of opinion. Certainly logistically there is gigantic investment in buildings, warehousing, delivery, staff, stock import, insurance etc etc and we are an isolated country of course without which nothing happens. So shareholders expect dividends on their money . Take Meridian for instance making huge profits and have a monopoly on power supply and therefore pricing and no opposition but of course owned by the government. So is someone else getting a return on investment not ok unless it's the government ? Hypocrisy ?
Imagine
Posted on 26-08-2022 13:39 | By Kancho
If the Australians decided government interference and politicking to withdraw . We would be in a dire impossible position . A new buyer for the businesses ingesting billions of dollars still wanting a good return so still no answers. It's just looking for votes next year but could end up with egg on face
Investment
Posted on 27-08-2022 10:49 | By Kancho
The government want overseas investment and largely we have it with supermarkets and banks etc and most larger industry . Without it we would have less jobs and services. Investors want and need a return. So why is the government borrowing billions to buy a failed bank. NZ post and Superannuation fund don't want it. Seems after 20 years only 4 percent of people want it either. They certainly can't manage it and it's underfunded so more money down the drain a price for misguided ideology
@Kancho
Posted on 27-08-2022 13:07 | By morepork
A $20 billion industry controlled by 2 companies and dealing with an essential service that people MUST have, is not quite the same as industries and services where people can opt out. I too, do not see profit as "dirty"; it is what drives our capitalist society. But there are limits. A cornered market in an essential service needs to be opened to proper competition. NZ, a food-producing nation, has the highest grocery prices in the World. I'm not advocating strangling the Oz companies, just making the playing field more level, and with a temporary intervention to allow other players to get established. Eventually, the market will even itself out, but it won't do that while it is cornered. And don't get me started about Meridian and Electricity in general here...
Meridian
Posted on 27-08-2022 15:20 | By Kancho
We can't opt out, as you say, as power supplies that are already tottering towards insufficiency. The government are not attacking Meridian for excessive profits as they own it. So we need Australian and many other nations and we have clamoured for it to prop up pretty much everything. The plus is we let other countries polute their own backyard to send us everything. We also have some of the poorest productivity in the OED so that is costly to us too as it's too expensive to produce products here. As to supermarkets how do you get competition in a small country, it's failed several times. As to grocery prices we import an awful lot a long way and long distribution lines internally too. Burn more coal yay.
Political vote seeking
Posted on 27-08-2022 15:27 | By Kancho
Retail prices won't change as this political window dressing is ideological driven . The big two have to supply their stores from their import and warehousing. So they may have to on- charge and supply diaries etc but can you imagine this means these smaller businesses will lower price or margins, I think theft are much more likely to pocket any difference.
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