Finance Minister Nicola Willis. Photo / Michael Craig
Finance Minister Nicola Willis came in for some fudge flak this month on her handling of the economy. The Grocery Action Group could pot the same shot at her handling of the cost of living crisis. Plenty of platitudes when she became Grocery Minister but since then it’s been “Silent Night”.
At her appointment, she talked a tough game. To be fair she has ensured the regular breaches of the Fair Trading Act, such as misleading prices, will now attract significantly higher fines and the Commerce Commission can now bring civil actions against outlets not following the rules.
There has also been dabbling with planning laws to make it easier to set up shop, but none of this goes to the heart of the problem.
Kiwi shoppers pay significantly more for Christmas staples than Australians. Photo / 123rf
Even the regulator admits there are structural problems which it alone cannot fix – despite the fact it has 13 supermarket investigations underway. What is required is government intervention.
Minister Willis is waiting on a consultant’s report on the potential for forced divestment. That means potentially the duopoly of Foodstuffs and Woolworths would be forced into shedding some of their brands.
For example, Foodstuffs might be forced to shed either New World or Pak’nSave, and Woolworths forced to split out Woolworths from Fresh Choice.
But it’s not as if the Foodstuffs supermarket franchise owners will lose their stores – they might just be buying from different sources.
The consultants will be looking at the cost-benefit of such a forced divestment. Let’s hope consumers are central to that analysis because it is consumers who will benefit at the checkout from more competition.
We know that because the green shoots of competition are showing in Auckland where Costco’s west Auckland store has lowered the 87% domination of the duopoly to 71%. (Don’t get excited though, in Australia the supermarket duopoly of Coles and Woolworths faces criticism for having 60% of the market).
Costco’s west Auckland store has lowered the 87% domination of the supermarket duopoly to 71%.
Former Minister Steven Joyce was added to the Foodstuffs Board in August this year. Prior to that, he was on record saying Foodstuffs should potentially consider divesting some of its brands if it wants its structure to survive.
But we haven’t heard anything more from Joyce on that since then.
In the absence of another big new player there are limited choices – the Warehouse goes up and down with its supermarket offering, Paddock to Pantry is increasing its online options and is growing the grocery range in Z stations across the country. Wonky Box has been an online option for a while delivering fruit and vegetables.
What consumers are dreaming of is an affordable Christmas – maybe not this year but 2026 is an election year.
Who offers the most digestible carve-up may win the just desserts.
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