The debate over establishing a Grocery Code of Conduct for supervising supermarkets has been going on for some time, but things are becoming very hot in the last yearAfter New Zealand’s main wholesale chain Foodstuffs made changes to its buying model, it was seen by many as hurting food companies from producer to supplier.
This appears to accelerate progress on coding and calls for its mandatory implementation, which NZFGC Chief Executive Katherine Rich told the House of Representatives in Parliament recently.
“[NZFGC has requested that] The House of Representatives supports the establishment of a mandatory Grocery Code of Conduct for supermarkets, similar to those in Australia and the United Kingdom, “Rich said through the petition.
“[This is crucial] to address the potential abuse of market forces against food and foodstuff producers arising from New Zealand’s highly concentrated wholesale retail market – person We have the most concentrated ownership of supermarkets in the world with more than 95% controlled by two retail teams. “ person
The two retail teams mentioned are Foodstuffs (New World, PAK’n SAVE, Four Square) and Progressive Enterprises (Countdown, SuperValue, FreshChoice). person
“When there is a degree of dominance in the market, it’s good to have a clear basis for acceptable business behavior [and] such a code in New Zealand would provide a clearer framework for business dealings and negotiations in the wholesale sector person , “He said FoodNavigator-Asia.
Rich also emphasized that the Foodstuff incident is just one of the reasons showing that it is time for this code to come into force, but it is not the only one and there have been a ‘combination of factors’ in the last 10 years that support this formation.
“[The Foodstuffs incident is] related to this, sure, but there has actually been a combination of factors in the last decade that has led New Zealand businesses to believe that now is the right time for code like this. “He said.
“Codes in Australia and the UK have made a significant difference to supplier and retailer relationships by providing a clear framework for dealing with business – [and it is time for New Zealand to have the same now.”
The United Kingdom established its code in 2009, and Australia established its own in 2014.
NZFGC’s petition received 500 signatures from the local industry in less than a month after it was opened for receiving signatures in November last year. This has now been tabled in Parliament and will be allocated to a Select Committee for consideration.
New Zealand Parliament member Greg O’Connor received the petition and spoke in support of a mandatory code, saying in a formal statement that it would ‘also be good for supermarket owners, with those with good practice not being disadvantaged by the bad ones, because everyone would be working to the same rules’.
The New Zealand government is also in the midst of conducting a market study into the local supermarkets industry, looking to identify any issues regarding competition product prices and procurement.
This study has been warmly welcomed by the local industry, with Rich telling us that supermarkets’ ‘privileged market position’ is accompanied with ‘additional responsibilities and accountabilities’ on the part of these supermarkets, and the government study would help ensure consumers get a ‘fair deal’.
She also suggested suggested that the review make the effects of such concentrated market power in a community more transparent, as well as how factors like costs, deductions, deletion threats, supermarket margin expectations and more are affecting local suppliers as well as end-product prices charged to consumers.
The study is being conducted by the local Commerce of Commission, and a final report is expected by November 2021.
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