The review was announced by Minister of Commerce and Consumer Affairs David Clark earlier this month, who stressed that one of the main objectives here is to analyze competition in the supermarket sector.
“Groceries are one of our most routine expenses, so we wanted to ensure a fair price – [We] Be aware that the average Kiwi household spends about 17% of its weekly expenditure on food, and this is increasing year after year. “Clark said in the initial announcement.
“This has been a tough year for many Kiwis and launching this study is the first embodiment of a [campaign] commitment to making sure we don’t pay more than we should during the weekly shop. person
“A market study to supermarkets will identify whether there are any issues affecting competition, potentially leading to predictable recommendations [grocery shopping] gentler on household budgets – Several major supermarket chains said there was already a healthy level of competition in the sector, and we wanted to test if that was the case. “ person
According to the Chief Executive of the New Zealand Food and Grocery Council (NZFGC), Katherine Rich, this is the first time such a study has been conducted in a supermarket in the country.
“In terms of supermarket ownership, New Zealand has the most concentrated market in the world – person two dominant teams control 95% of the main supermarkets, “She says FoodNavigator-Asia.
“[There] is an indication that competition in supermarkets has weakened, and [in such] A person small market [with such high ownership concentration, this] is a natural question for governments to ask. person
“[Such a] preferential market positions come with additional responsibilities and accountabilities [on the part of privileged players] – and the government aims to ensure consumers get a fair deal. “ person
Rich suggests that the review makes the effect of concentrated market forces in the community more transparent, as well as how factors such as costs, reductions, threat of elimination, supermarket margin expectations and more affect local suppliers as well as the price of the final product being charged to consumers.
When asked whether supermarkets or local companies have anything to fear in terms of the product price impact or marketing mechanisms affected by this review, he said this was unlikely and emphasized that the NZFGC would wholeheartedly support this initiative.
Clark has stated that the review will be completed by the Trade Commission and the final report will be published on 23 November 2021.
More details about this research person
According to Clark filing documents Started a Trade Commission market study to a supermarketWhat has been published on the website of the Ministry of Business, Innovation and Manpower (MBIE), there is a ‘clear public interest in undertaking a market study into New Zealand’s wholesale retail market’.
“[The supermarkets] Foodstuffs (New World, PAK’nSAVE, and Four Square) and Progressive Enterprises (Countdown, Super Value and FreshChoice) account for about 75% of New Zealand’s wholesale retail market, “Clark said through the documents.
“[There are indicators which] may suggest a lower level of competition than I would expect in a workable competitive market, [such as] unequal bargaining power that allows supermarkets to push unreasonably low prices for suppliers – While low wholesale prices are usually good for consumers, it is uncertain how much of these benefits are passed on to consumers. person
“[In addition, prior] research has [indicated decreased competition] for supermarkets, grocery stores, and specialty food retailers, [and] The 2019 Household Expenditure Survey shows average weekly household expenditure on food increased 9.2% in the three years to 30 June 2019 compared to a 6.5% increase for other categories – [this is important] because food prices affect all New Zealanders. “ person
He added that the wholesale sector is considered to have existed now ‘moving from the COVID-19 response to the recovery phase’, So the start of this process will be timely.
Grocery Store Code of Conduct person
Interestingly, while the MBIE document states 75% as market ownership by the two power plants, the NZFGC has identified this figure as close to 95%, which Rich says is based solely on mainstream supermarkets.
“We came to 95% representing major supermarkets like Countdown, PAK’nSAVE, New World, Farro, Moore Wilsons etc – they may include food solutions companies such as My Food Bag, Hello Fresh as well as specialty stores,”He told us.
“[Either way, I believe that] This study can help establish a person New Zealand Grocery Store Code of Conduct person person – person it is a natural progression. person The Code will never be a panacea, but those with experience in Australia and the UK report the Code there has made a huge difference, overriding some bad behavior immediately and laying the groundwork for better retailer / supplier relationships. person
“I believe the Code here will ensure better treatment for all foodstuff suppliers to supermarkets – farmers, producers, marketers and traders in particular.” person
“Other markets facing similar concerns have moved in this direction and it makes sense that New Zealand does too.” person