John MacDonald: $10M fines will sort out the supermarkets. As if

The Commerce Commission says the big supermarket operators are still creaming it. 

They’re not making the changes the Commission wanted them to make. Their profits are still too high and the Commission is talking tough, saying it would like to be able to fine them up to $10 million if they keep ripping people off and ignoring what the Commission wants. 

But I don’t think that $10 million fines would make the least bit of difference. Because we’re talking here about a sector worth $25 billion, do you really think they’re going to worry about the risk of a $10 million fine? 

Of course they’re not. They’d just be like the garden shops that open up shop on public holidays. It’s against the rules. They know they might be fined, but they run the risk, anyway because they make way more than enough to cover any potential fine and then some.   

And the supermarket companies are the same. They haven’t worried about the Commerce Commision up until now —which has been demanding all sorts of changes on behalf of us consumers— and they won’t be any more worried about the Commerce Commission today than they were before it came out with its latest assessment of the supermarket sector. 

These companies know they have it over us. What’s more, can you imagine how long it would take to actually prove a case of price-gouging or whatever against these outfits?  

And while that was all going on, they’d just keep hiking up the prices and “ripping us off” - as the Commission put it yesterday. 

Actually, it was the Commerce Commission’s grocery commissioner, Pierre van Heerden, who said that. It’s him doing the tough talking. Which is about time because, until now, he’s been all ‘measured tones’ on it. But yesterday, he put his serious face on. And good on him. 

But it’s going to take a lot more than him putting on his serious face for the supermarket operators to pay any attention. 

On paper anyway, it is an absolute rort that the prices we pay at the supermarket have been going up at a faster rate than increases in what the supermarkets pay their suppliers. That’s the nub of what the Commerce Commission is saying. 

Which makes a complete joke of the lines supermarkets like to use about “passing on the savings to you”. 

As far as the Commerce Commission and the Grocery Commissioner are concerned, the supermarkets haven’t been doing that at all. They’ve been screwing their suppliers —getting their prices down— but they certainly haven’t been passing them on. 

Where I’m torn in all this is that I know supermarkets are businesses. They have to make profits to survive. They’re not charities. 

Even though they provide some of the essentials of life, they’re not charities. They exist to make money and they’re doing that. 

For a long time now, owning a local supermarket has been seen as a licence to make money. It’s not easy. And I know with the likes of Foodstuffs, at least, you can’t just walk in and take over a supermarket. Even if you’ve got the money to buy one, you have to do your time working in a supermarket - getting a real understanding of how they work. 

Nevertheless, people have made good livings out of it. But it’s only in recent years that us customers have looked up and thought, hold on a minute, when it seems that we go through the checkout and it gets more expensive every time. 

So yes, a supermarket is a business which needs to be profitable. And yes, I’m torn when it comes to punishing businesses for being successful. For being profitable. 

But when a business does that in an underhanded way - that’s where I draw the line. And, like the Commerce Commission and the Grocery Commissioner, I think sup

Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Morning's Podcast with John McDonald
from News Talk ZB.

Speaker 2 (00:13):
The Commerce Commission, eh it's it says the big supermarket
operators are still creaming it. They're not making the changes.
This is the supermarkets. They're not making the changes the
Commission wanted them to make. Their profits are still too high,
and the Commission is talking tough, saying it would like
to be able to do things like finding them up

(00:33):
to ten million bucks if they keep ripping people off
and ignoring what the Commission wants. But I don't think.
I don't think ten million dollar fines would make the
least bit of difference because we're talking here about a
sector worth twenty five billion dollars twenty five billion. Do

(00:54):
you really think they're going to worry about the risk
of a ten million dollar fine. Of course they're not.
They would just be like the garden shops, you know,
the ones that open up on public holidays. It's against
the rules. They know they might be fine, but they're
run the risk anyway because they make way more than
enough to cover any potential fine. And then some and
the supermarket companies they're exactly the same. In fact, they

(01:18):
are what words should I use? They're worse. They haven't
worried about the Commerce Commission up until now, which has
been demanding all sorts of changes on behalf of on
behalf of us consumers. And I tell you what, the
supermarkets won't be any more worried about the Commerce Commission
today than they were this time yesterday before it came

(01:39):
out with its latest assessment of the supermarket sector. These companies,
they know they have it over us. And what's more,
can you imagine how long it would take to actually
prove a case of price gouging or whatever it is
against these outfits, And while that was all going on,
they would just keep hiking up the prices and ripping

(02:03):
us off, as the Commission put yesterday. Actually it was
the Commerce Commission's Grocery Commissioner, Pierre van Heerden who said
that it's him actually doing the tough talking, who said
yesterday that we are being ripped off. And let's face it,
it's about time he started talking tough because until now
all he's been all measured tones on It isn't he

(02:26):
Yesterday he put on a serious face, and good on him.
I'll tell you what, though, it is going to take
a lot more than the Grocery Commissioner putting on a
serious face with the supermarket operators in the supermarket companies
to pay any attention, I mean on paper anyway, it
is an absolute rot. In fact, it's not just on paper.

(02:46):
It is an absolute rot that the prices we pay
at the supermarket have been going up at a faster
rate than increases and what the supermarkets paid their supplies.
That's another of what the Commerce Commission is saying, which
makes a complete joke, doesn't it. Of the lines that
supermarkets like to use about passing on the saving to you,

(03:07):
we're passing on the savings to you, load of odd nonsense.
As far as the Commerce Commission the Grocery Commissioner are concerned,
they haven't been doing that at all either. They've been
doing the complete opposite. They've been screwing their supplies, getting
their prices down, but they certainly haven't been passing them
on to us. Where I'm torn in all this, I'm torn.

(03:31):
I'll get back to where I am, but I'm torn
because I know that supermarkets are businesses, and I know
that they have to make profits to survive. They're not charities,
even though they provide some of the essentials of life,
they're not charitable organizations. Thanks us to make money, to
make profits, and they are doing that. And for a

(03:52):
long time now, owning a local supermarket has been seen
as a license to make money. Isn't it not an
easy way to make money? I know what the likes
of food stuffs, for example, you can't just walk in
and take over a supermarket, even if you've got the
main needs buy one. You have to do your time
working on the floor in the supermarket, getting a real
understanding of how they work. You've got to start, you know,

(04:13):
you can't just walk in and get a new world.
Got to start at your four square and work your
way up as how they operate. Have the less people
have made good livings out of doing that. But it's
only in recent years that us customers we've looked up
and thought, hold on a minute, you know, when it
seems that we go through the checkout and it gets
more expensive every time. So yes, a supermarket is a

(04:36):
business which needs to be profitable. Use I'm torn when
it comes to punishing businesses for being successful, for being profitable,
but when a business does that in an underhanded way,
that's where I draw the line, and like the Commerce
Commission and the Grocery Commissioner, I think supermarkets have been underhanded,

(04:57):
especially when you consider the fact that the prices we
pay at the checkout have been going up at a
faster rate than increases in what the supermarkets pay. This
applies that that is underhanded, and good on the Grocery
Commissioner for calling them out, but I don't think the
supermarket companies will care, and I certainly don't think the

(05:17):
threat of ten million dollar fines will make any difference either.

Speaker 1 (05:22):
For more from Category Mornings with John McDonald, listen live
to news talks It'd be christ Church from nine am weekdays,
or follow the podcast on iHeartRadio.