Photo: Unsplash / Tara Clark
The Commerce Commission says suppliers are scared to speak up about how they’re treated by supermarkets, so it’s running an anonymous survey to capture their experiences.
The commission’s first survey, held in 2024, revealed suppliers felt they had limited ability to negotiate with the big players.
Commerce Commission head of groceries Alice Hume told Nine to Noon power is tipped heavily in big retailers’ favour, with suppliers afraid to speak out.
“If you think about the dominance of the supermarkets, they’ve got 80 percent of the market.
“If you’re a supplier, and if you’re only dealing with one or two of them, that could be most of your business that’s on the line, so … it is a real valid concern for suppliers.”
There were rules in place to address the power imbalance, Hume said.
“But we still need to know from suppliers the things that they’re really concerned about.”
The 2024 survey revealed concerns about “delisting”: how supermarkets decide whether to pull products from their shelves, Hume said.
The Grocery Supply Code, which governs negotiations between suppliers and supermarkets, now forces supermarkets to be transparent about that, she said.
Suppliers also have a right to appeal through an independent dispute resolution service, Hume said.
The survey would help the Commerce Commission identify the biggest problems it needs to focus on.
Woolworths NZ commercial director Rod Gibson said the company had not seen any signs that suppliers were scared to talk to them.
“Woolworths NZ works hard on ensuring we have good, transparent relationships with our suppliers,” he said.
“We welcome engagement with them and we encourage open discussion and dialogue.”
Gibson noted in the 2024 survey, Woolworths was considered the easiest supermarket to deal with.
The supermarket supported the Commission’s survey, he said.
“It’s critical that we have good working relationships with our supply partners – if they don’t have sustainable, thriving businesses, neither do we.”
Foodstuffs head of external communications Stefan Herrick said the North and South Island co-operatives respected all suppliers.
Negotiation was part of the job in a competitive market, and Foodstuffs did that fairly, he said.
“Commercial discussions can sometimes feel intense, so we encourage suppliers to raise any concerns directly with their Category Manager or other members of our Merchandise team.
“We also run regular updates and Q&A sessions, with hundreds of suppliers joining each month to share feedback and stay informed.”
Suppliers regularly raised questions and were responded to “without bias”, he said.
Foodstuffs respected the commission’s work to understand supplier experiences, said Herrick.
“Surveys like this provide valuable insights into how we can continually strengthen our relationships and ensure fair, transparent, and productive partnerships and hopefully deliver benefit to consumers.”
Suppliers pressured, lack power – 2024 survey
The 2024 Grocery Supplier Survey found some suppliers felt pressured into “unfavourable terms”.
They felt there was a lack of transparency and communication about pricing, terms and decision making processes, and smaller suppliers felt “neglected or sidelined” in favour of larger players.
Suppliers rated Woolworths most positively, followed by Foodstuffs North Island.
“Foodstuffs North Island lags behind, with negative ratings outweighing positive across all measures,” the report said.
It said suppliers appreciated suppliers’ responsiveness, and clear communication.
This year’s survey closes on 17 March.
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