September 9, 2024 • 8 mins
The Finance Minister has voiced support for more action to be taken against the grocery sector.
The Grocery Commissioner's report into the sector has found no meaningful improvement in competition, increasing margins and high profitability.
Nicola Willis says most households would support a crackdown led by the Commissioner.
"I think most New Zealanders would agree that competition between the major supermarket players is important - and we want to get a good deal for consumers."
LISTEN ABOVE
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
With us right now, we have the Finance Minister Nicola
Lasye Nikola Hire You are you supporting the grocery Commissioner's
cracked down?
Speaker 2 (00:09):
Yeah. I think it's important that the Grocery Commissioner use
the powers that have been given to him to ensure
that the big supermarkets are being competitive and are behaving
within the code that they've all signed up to.
Speaker 1 (00:22):
Is it going to die because David Seymour is going
to oppose it.
Speaker 2 (00:27):
I've got no reason to believe that's the case. We've
got a law there that's being enforced, and I think
most New Zealanders would agree that competition between the major
supermarket players is important. We want to get a good
deal for consumers and enforcing the regulations is one way
of doing this.
Speaker 1 (00:42):
For the Grocery Commissioner to be able to go the
full hog that he wants to, he needs to get
some sort of sign off from legislators. Is it something
that just the minister can sign off or does it
have to go through cabinet?
Speaker 2 (00:51):
Well, he's already got a full suite of powers available
to him so, and of course he's only been up
and running for a few months. So the point is
use those powers that are available to you and if
he thinks that they're not sufficient, and he'd have to
bring that case to ministers, and yes, ministers would have
to decide whether we wanted to take further action. In
the first instance, I think he has to enforce the
(01:13):
law that's already there.
Speaker 1 (01:15):
Yes, So that is what he wants to be able
to do. Is he wants to be able to force
changes at wholesale, he needs a Section fifty six inquiry,
which he's going to do, and then the backstop is
granted to him by the minister. Does that need David
Seymour sign off.
Speaker 2 (01:29):
Look, this is not something that we have that we
have discussed as a cabinet, and I think that is
one step and then the next step. So the first
step is force what's there. The second step is for
those supermarkets to do compliance and make sure that they're
meeting the requirements that are there, and then any other
steps would be after that. So I'm not going to
(01:51):
get ahead of head of the s because did you.
Speaker 1 (01:53):
See David Seymore's comments over the weekends that weekend that
he opposes any further regulation by this guy.
Speaker 2 (01:59):
Well, look, I think what we can all agree is
that the ultimate solutions that we would like to see
is another entrant into the serve market space, which is
to say, what's the best way to disrupt the current geopoly.
It would be a third big player operating in the
serfmarket space. And so I think I agree with David
Seymour that removing any regulatory barriers that are currently preventing
(02:23):
that happening is a sensible idea. So, for example, we
know that the Resource Management Act and the Overseas Investment
Act could both pose regulatory barriers to a new ent
front wanting to enter the serve market space. So we
need to think about this from a range of angles.
Competition law and policy is one angle, but the broader
regulatory environment is another.
Speaker 1 (02:44):
Why would a third big player enter a market that
has been tinkered with and crushed by a grocery commissioner.
Speaker 2 (02:52):
Because if a third player thinks that it's a highly
profitable market, it certainly appears to be. They might think
that they can and compete effectively in that market with
something they might not otherwise have.
Speaker 1 (03:05):
Which third big player is going to come into a
market where we are talking like publicly about breaking up
supermarkets that that's high risk stuff.
Speaker 2 (03:14):
Well, I think what we want to see is competitive growthery.
Speaker 1 (03:19):
Yeah, we want to see it. It is is this
heavy handed approach with regulation actually not counterproductive and actually
stopping a third big player coming in.
Speaker 2 (03:29):
Look out of Actually, what you're saying, Heather, is that
when there's a duopoly in place, we should all just
lead them to do actually what they want to do,
because if we threaten to enforce competition, then they might
not like it.
Speaker 1 (03:41):
Well, I don't know. I mean, I'm not arguing that,
I'm I'm just I'm looking at what is happening and
just wondering if that is actually helpful or not.
Speaker 2 (03:48):
Well, I think that it's perfectly reasonable to expect that
the major market players should comply with the glare of
it stands, should act in a competitive way, that the
growth thy mission I should be able to use his
powers to enforce that. And ultimately, I don't think anyone
wants to see the grocery Commissioner having to take more
(04:09):
serious steps because the serve markets haven't complied. The first
test is they should comply.
Speaker 1 (04:14):
Do you reckon by the time. Look, the thing is,
I don't want it to continue the way it does, Right,
but I want to see so I just don't want
it to get worse. Do you reckon that by the
time you guys have finished in government, we will actually
have cheaper groceries.
Speaker 2 (04:26):
Well, the biggest driver there, as I've always said, as
the inflation rates, and we've got inflation coming back into
bands by the bank pooka. So we are not going
to see the extreme price increases at thes market checkout
that we've seen in recent years.
Speaker 1 (04:40):
You don't even sound confident.
Speaker 2 (04:43):
I am confident we're not going to see the extreme
price increases that we've seen AT's market checkout in recent years.
Speaker 1 (04:49):
I can tell your inflations come back, but are we
actually going to see grocery prices come back markedly? Because
you guys have solved the problem.
Speaker 2 (04:56):
Well, I think it is important that we enforce oh
competition measures in the grocery sector. I am concerned that
the duopoly we have had in place has not fostered
the kind of competitive prices for New Zealanders that we
would wish to see. And actually, when the OECD and
others look at the New Zealand economy, they warn us
(05:19):
at one of the risks of our small size and
a distance from markets is that you can get these
dominant players and what are really important consumer markets, and
that it's incredibly important that we have good regulatory frameworks
for enforcing market disciplines and competition. And that's the approach
our government is taking now.
Speaker 1 (05:38):
Simon Bridges reckons that the reason we're seeing liquidations up
by close to twenty percent year on year is because
the ID is forcing a lot of these businesses into liquidation.
They were they were taking a very kind of light
handed approach beforehand. Now that really tough on businesses. Do
you know if this is what's going on.
Speaker 2 (05:54):
Well, obviously it's really sad when any business gets to
the point of liquidation and entryoptsy and liquidation processes are
an absolute vast resort and they're about stopping businesses from
further trading because that they are unable to meet their
historic and current tax viabilities. And ultimately this is about
(06:15):
stopping insolvent businesses from trading trading. It is true that
during COVID, during this pandemic years, IOD was not doing
much of that proactive work and that that practice was
in place, But actually the truth is now there are
sadly some businesses that are simply not viable and are
(06:35):
unable to meet their text debts, and it's the right thing.
Speaker 3 (06:38):
To do for the IID to enforce those so because
what his argument is is if they just if this
is the ID, if the IID just gives these businesses
a little bit of breathing space, maybe through to twenty
five they'll be able to pay it back.
Speaker 1 (06:51):
You don't think so.
Speaker 2 (06:53):
Well, Look, obviously the IOD has to make those judgments
because the ID ultimately wants to get the tax that
it's owed it. It also wants to see businesses being
able to operate. But when they see a business that
is actually trading while unviable, that isn't able to meet
its historic tax debts, it's current tax debts, sometimes it
(07:13):
does have to act because ultimately, the way the tax
system works is that we're all expected to pay our
tax in full, and no business can go on forever
unable to do that.
Speaker 1 (07:24):
Nicholas, that Cabinet circular that instructs agencies government agencies to
allocate services based on need not race, Is that coming
from you?
Speaker 2 (07:34):
Yes, that will be. That's something that I have been.
Speaker 1 (07:37):
Working on and when is that going to come out?
Speaker 2 (07:40):
Very shortly Heather, a very well timed question from you.
Speaker 1 (07:44):
Oh is it like well timed? Like it will be
before the next time I talk to you.
Speaker 2 (07:48):
Well timed, that's right, Heather, Very good detective work.
Speaker 1 (07:52):
Oh look, thank you for that. Jeez, you know this
is going to be a shock to health New Zealand.
Do you realize that.
Speaker 2 (07:58):
Look, I think it's it's an important expression and we've
we're tired on it and I think it'll be a
good discipline for government agencies and we'll have more to
say about it very soon.
Speaker 1 (08:09):
Looking forward to it. Nicola, thank you very much as
always for your time. That's Nichola Willis, the Finance Minister.
There you go. You heard it here. First, your cabinet
cabinet circular, what is It's cabinet circular that's going to
come out and tell the agencies to buck up their
ideas and stop treating people differently just because they fucking
up a different back to different places. That's coming out
this week. How about that? For more from Heather Duplessy
(08:29):
Allen Drive, listen live to news Talks it'd be from
four pm weekdays, or follow the podcast on iHeartRadio.
With us right now, we have the Finance Minister Nicola
Lasye Nikola Hire You are you supporting the grocery Commissioner's
cracked down?
Speaker 2 (00:09):
Yeah. I think it's important that the Grocery Commissioner use
the powers that have been given to him to ensure
that the big supermarkets are being competitive and are behaving
within the code that they've all signed up to.
Speaker 1 (00:22):
Is it going to die because David Seymour is going
to oppose it.
Speaker 2 (00:27):
I've got no reason to believe that's the case. We've
got a law there that's being enforced, and I think
most New Zealanders would agree that competition between the major
supermarket players is important. We want to get a good
deal for consumers and enforcing the regulations is one way
of doing this.
Speaker 1 (00:42):
For the Grocery Commissioner to be able to go the
full hog that he wants to, he needs to get
some sort of sign off from legislators. Is it something
that just the minister can sign off or does it
have to go through cabinet?
Speaker 2 (00:51):
Well, he's already got a full suite of powers available
to him so, and of course he's only been up
and running for a few months. So the point is
use those powers that are available to you and if
he thinks that they're not sufficient, and he'd have to
bring that case to ministers, and yes, ministers would have
to decide whether we wanted to take further action. In
the first instance, I think he has to enforce the
(01:13):
law that's already there.
Speaker 1 (01:15):
Yes, So that is what he wants to be able
to do. Is he wants to be able to force
changes at wholesale, he needs a Section fifty six inquiry,
which he's going to do, and then the backstop is
granted to him by the minister. Does that need David
Seymour sign off.
Speaker 2 (01:29):
Look, this is not something that we have that we
have discussed as a cabinet, and I think that is
one step and then the next step. So the first
step is force what's there. The second step is for
those supermarkets to do compliance and make sure that they're
meeting the requirements that are there, and then any other
steps would be after that. So I'm not going to
(01:51):
get ahead of head of the s because did you.
Speaker 1 (01:53):
See David Seymore's comments over the weekends that weekend that
he opposes any further regulation by this guy.
Speaker 2 (01:59):
Well, look, I think what we can all agree is
that the ultimate solutions that we would like to see
is another entrant into the serve market space, which is
to say, what's the best way to disrupt the current geopoly.
It would be a third big player operating in the
serfmarket space. And so I think I agree with David
Seymour that removing any regulatory barriers that are currently preventing
(02:23):
that happening is a sensible idea. So, for example, we
know that the Resource Management Act and the Overseas Investment
Act could both pose regulatory barriers to a new ent
front wanting to enter the serve market space. So we
need to think about this from a range of angles.
Competition law and policy is one angle, but the broader
regulatory environment is another.
Speaker 1 (02:44):
Why would a third big player enter a market that
has been tinkered with and crushed by a grocery commissioner.
Speaker 2 (02:52):
Because if a third player thinks that it's a highly
profitable market, it certainly appears to be. They might think
that they can and compete effectively in that market with
something they might not otherwise have.
Speaker 1 (03:05):
Which third big player is going to come into a
market where we are talking like publicly about breaking up
supermarkets that that's high risk stuff.
Speaker 2 (03:14):
Well, I think what we want to see is competitive growthery.
Speaker 1 (03:19):
Yeah, we want to see it. It is is this
heavy handed approach with regulation actually not counterproductive and actually
stopping a third big player coming in.
Speaker 2 (03:29):
Look out of Actually, what you're saying, Heather, is that
when there's a duopoly in place, we should all just
lead them to do actually what they want to do,
because if we threaten to enforce competition, then they might
not like it.
Speaker 1 (03:41):
Well, I don't know. I mean, I'm not arguing that,
I'm I'm just I'm looking at what is happening and
just wondering if that is actually helpful or not.
Speaker 2 (03:48):
Well, I think that it's perfectly reasonable to expect that
the major market players should comply with the glare of
it stands, should act in a competitive way, that the
growth thy mission I should be able to use his
powers to enforce that. And ultimately, I don't think anyone
wants to see the grocery Commissioner having to take more
(04:09):
serious steps because the serve markets haven't complied. The first
test is they should comply.
Speaker 1 (04:14):
Do you reckon by the time. Look, the thing is,
I don't want it to continue the way it does, Right,
but I want to see so I just don't want
it to get worse. Do you reckon that by the
time you guys have finished in government, we will actually
have cheaper groceries.
Speaker 2 (04:26):
Well, the biggest driver there, as I've always said, as
the inflation rates, and we've got inflation coming back into
bands by the bank pooka. So we are not going
to see the extreme price increases at thes market checkout
that we've seen in recent years.
Speaker 1 (04:40):
You don't even sound confident.
Speaker 2 (04:43):
I am confident we're not going to see the extreme
price increases that we've seen AT's market checkout in recent years.
Speaker 1 (04:49):
I can tell your inflations come back, but are we
actually going to see grocery prices come back markedly? Because
you guys have solved the problem.
Speaker 2 (04:56):
Well, I think it is important that we enforce oh
competition measures in the grocery sector. I am concerned that
the duopoly we have had in place has not fostered
the kind of competitive prices for New Zealanders that we
would wish to see. And actually, when the OECD and
others look at the New Zealand economy, they warn us
(05:19):
at one of the risks of our small size and
a distance from markets is that you can get these
dominant players and what are really important consumer markets, and
that it's incredibly important that we have good regulatory frameworks
for enforcing market disciplines and competition. And that's the approach
our government is taking now.
Speaker 1 (05:38):
Simon Bridges reckons that the reason we're seeing liquidations up
by close to twenty percent year on year is because
the ID is forcing a lot of these businesses into liquidation.
They were they were taking a very kind of light
handed approach beforehand. Now that really tough on businesses. Do
you know if this is what's going on.
Speaker 2 (05:54):
Well, obviously it's really sad when any business gets to
the point of liquidation and entryoptsy and liquidation processes are
an absolute vast resort and they're about stopping businesses from
further trading because that they are unable to meet their
historic and current tax viabilities. And ultimately this is about
(06:15):
stopping insolvent businesses from trading trading. It is true that
during COVID, during this pandemic years, IOD was not doing
much of that proactive work and that that practice was
in place, But actually the truth is now there are
sadly some businesses that are simply not viable and are
(06:35):
unable to meet their text debts, and it's the right thing.
Speaker 3 (06:38):
To do for the IID to enforce those so because
what his argument is is if they just if this
is the ID, if the IID just gives these businesses
a little bit of breathing space, maybe through to twenty
five they'll be able to pay it back.
Speaker 1 (06:51):
You don't think so.
Speaker 2 (06:53):
Well, Look, obviously the IOD has to make those judgments
because the ID ultimately wants to get the tax that
it's owed it. It also wants to see businesses being
able to operate. But when they see a business that
is actually trading while unviable, that isn't able to meet
its historic tax debts, it's current tax debts, sometimes it
(07:13):
does have to act because ultimately, the way the tax
system works is that we're all expected to pay our
tax in full, and no business can go on forever
unable to do that.
Speaker 1 (07:24):
Nicholas, that Cabinet circular that instructs agencies government agencies to
allocate services based on need not race, Is that coming
from you?
Speaker 2 (07:34):
Yes, that will be. That's something that I have been.
Speaker 1 (07:37):
Working on and when is that going to come out?
Speaker 2 (07:40):
Very shortly Heather, a very well timed question from you.
Speaker 1 (07:44):
Oh is it like well timed? Like it will be
before the next time I talk to you.
Speaker 2 (07:48):
Well timed, that's right, Heather, Very good detective work.
Speaker 1 (07:52):
Oh look, thank you for that. Jeez, you know this
is going to be a shock to health New Zealand.
Do you realize that.
Speaker 2 (07:58):
Look, I think it's it's an important expression and we've
we're tired on it and I think it'll be a
good discipline for government agencies and we'll have more to
say about it very soon.
Speaker 1 (08:09):
Looking forward to it. Nicola, thank you very much as
always for your time. That's Nichola Willis, the Finance Minister.
There you go. You heard it here. First, your cabinet
cabinet circular, what is It's cabinet circular that's going to
come out and tell the agencies to buck up their
ideas and stop treating people differently just because they fucking
up a different back to different places. That's coming out
this week. How about that? For more from Heather Duplessy
(08:29):
Allen Drive, listen live to news Talks it'd be from
four pm weekdays, or follow the podcast on iHeartRadio.
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Intentionally Disturbing
Join me on this podcast as I navigate the murky waters of human behavior, current events, and personal anecdotes through in-depth interviews with incredible people—all served with a generous helping of sarcasm and satire. After years as a forensic and clinical psychologist, I offer a unique interview style and a low tolerance for bullshit, quickly steering conversations toward depth and darkness. I honor the seriousness while also appreciating wit. I’m your guide through the twisted labyrinth of the human psyche, armed with dark humor and biting wit.