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HomeNEWSGovernment announces a supermarket referee

Government announces a supermarket referee

Following the introduction of the government regulating the supermarket duopoly, a Grocery Commissioner will be established, based within the Commerce Commission.

The commissioner will help keep pressure on the grocery sector by providing annual state-of-competition reviews.

“The Grocery Commissioner will be a referee of the sector, keeping the supermarket duopoly honest and blowing the whistle where it suspects there is a problem,” says Minister of Commerce and Consumer Affairs, David Clark.

“They will maintain a close eye on how Government’s reforms for the sector are implemented and ensure Kiwis are getting a fair deal at the checkout.”

“This is the latest in a suite of measures the government is taking to get better outcomes for New Zealanders at the checkout and follows the passing of legislation last week that bans major supermarkets from blocking their competitors’ access to land to set up new stores,” says Clark.

The regulations and watchdog come after the government decided to regulate the supermarket duopoly after a Commerce Commission market study showed that supermarkets earn $1 million a day in excess profits.

Clark says that historically there has been an “imbalance in the bargaining power” that major grocery retailers such as Countdown and Pak’nSave compared to smaller retailers.

“Global factors continue to drive up the cost of living around the world and high grocery prices are making it hard for New Zealanders right now which is why the government has taken a range of steps to take the pressure off immediately while also tackling the underlying problem in the supermarket sector which is the lack of competition,” says Clark.

Clark adds that the regulations and watchdogs will aid the Commerce Commission in gaining information when it comes to economic and competition regulation, fair trading and consumer protection.

A legislation to establish the Grocery Commissioner will be introduced later in 2022 following the bill’s passing.

The bill will cover regulations that were previously mentioned such as a code of conduct, ensuring loyalty programmes are easy to understand and transparent and opening their wholesale arms to “would-be competitors”.

He says that this will be important for smaller, artisan brands and the “emerging start-ups” that are also offering products.

“We want them to feel empowered and we also want consumers to have the added variety when they go to the supermarket,” he adds.

A draft of the code of conduct has been developed and is available on Ministry of Business, Innovation and Employment’s website and will be open for feedback.

The New Zealand Food and Grocery Council says they welcome a Grocery Commissioner inside the Commerce Commission.

“The commissioner will hold supermarkets to account and help promote the competition shoppers and the sector as a whole so desperately need,” says a spokesperson.

“As well as intimate knowledge of economic and competition regulation, fair trading and consumer protection, the Commission now has a very deep understanding of the grocery sector thanks to its work on the grocery market study.”

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