Sue Chetwin: Grocery Action Group lead on the Commerce Commission finding competition in the supermarket sector has not improved

The Grocery Action Group wants more regulation in our supermarket sector.  

The Commerce Commission's first annual report on grocery shows competition has not meaningfully improved. 

Foodstuffs and Woolworths could now face hefty fines for failing to treat small suppliers fairly or breaking a new wholesaler code. 

Group lead Sue Chetwin told Ryan Bridge we need structural change to split up this big duopoly. 

She says the Government has to bite the metal here and say we need more regulation to address the state of the industry. 

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Episode Transcript

Speaker 1 (00:00):
No meaningful improvement in the grocery sector. This is the
competition issue. After two years. This is despite the ComCom reports,
the market studies, the Grocery Commissioner being appointed and up
and running. The first annual report from the ComCom into
the sector has been released and it basically says nothing
meaningful has happened. So Chetwyn is with the Grocery Action Group.

(00:22):
She's with me this morning, So great to have you
on the show.

Speaker 2 (00:24):
Good morning, good morning.

Speaker 1 (00:27):
So are we ever going to fix the issue?

Speaker 2 (00:32):
OK? I think it is possible to fix the issue,
but structural change has to occur. So I guess the
government has to sort of bite metal here and say
we need more regulations to do something about the state
of our industry. So, you know, we have a jawopoly

(00:53):
that has more than eighty percent control of the basically
the food that we buy, and all of the rules
that they've put in place all very well meaning, but
have not worked. They have really just printed around the edge.
So unless you make some structural change to encourage competition

(01:15):
or to allow competition to happen, then we're just going
to get more of the same.

Speaker 1 (01:20):
Grocery commission to mention the one hundred sites the land
that the supermarkets are supposedly sitting on. You know, is
that to block competition or are they just land banking
because it's profitable, or are they car parks or storage facilities?
You know, is that number realistic?

Speaker 2 (01:39):
Look, I think the number represents all of the land
they own, so some of it may be legitimate for
say car parks, But the Comments Commission wouldn't have mentioned
it unless it has done the research to show that
it is basically the duopoly buying and that could be

(02:01):
useful for supermarkets the block competitors. And you know, just recently,
you know, we had the you know, the big fine
for food stuffs for land provenance. So that's buying land
and then putting on rules around it and selling it.
But that those rules mean that no competing supermarkets could

(02:21):
be put on it. This is more of the same
that was.

Speaker 1 (02:24):
More historical, those charges that were brought right, this is
now apparently one hundred sites that they're sitting on tap.
So what do you want to do? You want the
government to force them to sell the land.

Speaker 2 (02:34):
Absolutely or do something with it that looked like a
supermarket and not a vape tron and Also, I think
it needs to give the overseas you know office that
allows competitors, you know, potentially overseas competitors to come in,
so they might serdden need to free up some rules

(02:56):
around there. They need to free up other regulations. They
definitely need to free up land. But I think critically,
and the OECD also recommended this, they need to look
at forcing the supermarkets to sell some of what they own,
so you know, maybe breaking up pack and Save and
New World. You know, maybe Warwors has to divest some

(03:21):
of its supermarkets as well. So unless you get that
structural change, you're not going to get more competition in
New Zealand.

Speaker 1 (03:29):
If you have the state interfering in a sector like
that to the extent that you're suggesting, wouldn't it put
off private enterprise from wanting to come and invest here
in the first place.

Speaker 2 (03:40):
Well, look, I think we've just got a broken market here.
And that's what you know, that's what regulation is for
in a way, is to make sure that we encourage competition.
So why is it that New Zealand has eighty percent
of you know, the supermarket industry owned two supermarkets, where

(04:02):
and say Ireland a similar size had five suitmarkets or
with about twenty percent of the market. So New Zealand
has one of the most dense markets in the world,
so it doesn't get much worse. So at least you
have some government interference to protect consumers and suppliers. Then

(04:22):
it's just going to be more of the same if.

Speaker 1 (04:23):
You keep getting the same result, and we'll have another
report in another two years saying exactly the same thing
that nothing's changed. So thank you very much for your
time this morning, Suit Chetwyn who's with the Grocery Action Group.
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