John MacDonald: The not-so-super rescue plan for shoppers

It’s just over four years since the Commerce Commission released its first report on the supermarket sector in New Zealand and, yesterday, the Government announced what it’s going to do.

Which, in my view, will achieve nothing.

To be fair, Nicola Willis wasn’t in Government four years ago and it was Labour that received that first report and went about hiring the Grocery Commissioner.

Who, I think we can all agree, has done next-to-nothing. My supermarket bills certainly haven’t got any cheaper since he’s been at his desk.

So the Government is going to make a change to the fast track legislation specifically targeted at making it quicker for an overseas operator to move in to New Zealand and start building supermarkets here.

The law change is going to be done by Christmas and then the likes of Aldi and Lidl will be falling over themselves rushing to set-up shop here. As if.

Because it’s been my view all along that, if these overseas outfits wanted to be here, they would.

A country the size of ours means nothing to the other big operators. No matter how much red tape the Government wants to get rid of.

Bearing in mind too, that no supermarket chain is a charity.

Let’s take German operator Aldi - which is often touted as an international operator that could come here and create more competition.

It’s kind-of here already. Because it’s been registered with the New Zealand Companies Office since 2000. But it hasn’t bothered doing anything more than that - focusing on Australia, instead.

But, despite Aldi operating across the Tasman, Australians are still paying through the nose.

The Australian Competition and Consumer Commission put-out a report earlier this year saying that Aldi is among the most profitable supermarket chains in the world.

Prices in Australia have risen sharply over the past five years, with the supermarkets increasing profit margins during that time. Aldi being one of them.

As for Nicola Willis claiming that Costco might want to set up a few more stores, that wouldn’t make supermarket prices cheaper for people everywhere.

The Minister has acknowledged that she doesn’t see this as any sort of overnight fix. She says the lack of competition in the supermarket sector has developed over the past 20-or-30 years and told Newstalk ZB today that she’ll know this policy has worked when we have another competitor operating in all the main urban centres.

Don’t hold your breath, minister.

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Mornings podcast with John McDonald
from Newstalk ZB.

Speaker 2 (00:12):
Do you know.

Speaker 1 (00:14):
Jen?

Speaker 2 (00:15):
It was just over four years since the Commerce Commission
released its first report on the supermarket sector in New Zealand.
Four years and yesterday the government announced what it's going
to do about it, which in my view will achieve
absolutely nothing. But let me come back to that. To
be fair though, Nichola Willis, she wasn't in government four

(00:38):
years ago, and it was Labor that received that first
report and went about hiring the Grocery Commissioner remember him,
are you there? Mate? Who I think we can all
agree has done next to nothing. My supermarket bills certainly
haven't need cheaper since he's been sitting at his desk.

(00:59):
What about you. Back to the present though, and the
current government's express lane place, which of course is a
play on words because it's all about supermarkets and express lanes.
So the Economic Growth Minister announced ys today that the
government is going to make a change to the fast
Track legislation specifically targeted at making it quicker and easier

(01:22):
for an overseas operator to move into New Zealand and
start building supermarkets here. The law change is going to
be done by Christmas, and then the likes of Aldi
and Little they'll all be falling over themselves, rushing to
set up shop here as if, as if, because it's

(01:43):
been my view all along that if these overseas outfits,
if they wanted to be here, they would be here
by now. Nichola Willis was telling Mike this morning. You
might have heard it just after seven point thirty. She
was telling him about possibly another Costco operating here. When
Mike pushed her a bit on that, she said, Costco
has talked about opening quote several new stores, but that's it,

(02:06):
and that is all there will ever be because the
country the size of ours means nothing to the other
big operators, no matter how much red tape the government
wants to get rid of. Bearing in mind too, that
a supermarket chain is not a charity. Let's take Ald,
the German operator, which is often touted as a potential

(02:28):
outfit that might want to come here and create more competition.
It's kind of here already, Ald, because it's been registered
with the New Zealand Company's Office since two thousand, twenty
five years ago, hasn't bothered doing anything more, though, it's
focused on Australia instead. But guess what. Guess what, despite
Aldi operating across the Tasman, the Australians are still paying

(02:50):
through the nose for their groceries. You might remember the
Australian Competition and Consumer Commission put out a report earlier
this year which said that ALD is among the most
profitable supermarket chains in the world and prices in Australia
have risen sharply over the past five years, with all
the supermarkets increasing profit margins during that time as well,

(03:12):
LD being one of them. So even if they did
come here and that's enough in very small font Even
if they did come here, that wouldn't be cheap deal
city trust me. As for Nicola, willis claiming that Costco
might want to set up a few more stores. Even
if that happened and I would pick, there'd be no

(03:34):
more than three additional stores to the one it's god already.
Even if that happened and we got one in christ
Church for example, that wouldn't make supermarket prices cheaper for people.
And Ashburton, for example, would it make no difference for
them unless I wanted to drive up Stone Highway one
to do their shopping. Nicola Willis did acknowledge I'll give

(03:55):
her this. She did acknowledge that she doesn't see this
as any sort of overnight fix. She told Mike this
morning that the lack of competition in the supermarket sector
has developed over the past twenty or three years, or
a nice bit of political backside covering there. But when
Mike pushed her and asked her how she will know
this policy has worked, she said, it'll be when we

(04:17):
have another competitor operating in all the main urban centers.
She is dreaming, the government is dreaming. But what do
you think. How do you ride our chances of attracting
an international supermarket chain to New Zealand to set up
shop in all the main urban centers. How do you

(04:38):
ride our chances? And with this announcement, as far as
you're concerned, is the government living up to its promise
to make it cheaper at the checkout?

Speaker 1 (04:47):
For more from Caterbory Mornings with John McDonald, listen live
to news Talks It'd be christ Church from nine am weekdays,
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