The Commerce Commission made that clear more than four years ago: New Zealand does not lack supermarket sites; it lacks competitive operators.
So Seymour’s sensible-sounding solution leaves the real problem untouched – the power of Woolworths and Foodstuffs, and a market structured around protecting them.
Similarly, the Commission’s release of its wholesale inquiry outcome this month recognised what consumers, suppliers and would-be competitors have known for years: the maze of rebates, discounts and other payments between major suppliers and the big supermarket groups is not harmless back-office accounting.
It shapes what gets on shelves, what rivals can buy and what Kiwi families ultimately pay at the checkout.
So yes, its plan to further investigate those payments through the tools it already has, rather than call for more new regulation, is sensible.
Necessary even.
The Commission says supplier payments are extensive – worth around $6 billion a year – and reinforce the low level of competition in our grocery market.
That’s important. But it’s also familiar.
For consumers still paying some of the highest grocery prices on the planet, the question is not whether any of these actions are sensible, it’s whether they will shift the dial by even a millimetre.
The Commission has been saying for years competition is not working well for consumers. New Zealand’s grocery market is dominated by a duopoly and shoppers are paying high prices through structure, not accident.
The diagnosis is sensible. The Commission’s recommendations are sensible.
The response since its supermarket study more than four years ago has been sensible too.
As a result of that study we have had: the appointment of a Grocery Commissioner; a Grocery Industry Competition Act; a supply code; new rules on fair trading and contracts; unit pricing; wholesale access; and closer scrutiny of supermarket conduct.
All of it sensible and yet, for the person pushing a trolley down the aisle, the market still looks much the same.
Woolworths and Foodstuffs dominate.
The same barriers to entry remain. The same buying power still shapes what suppliers can negotiate and what rivals can realistically offer.
There is still no meaningful third national operator and importantly no obvious path for one to appear at the scale required to challenge the incumbents.
Sensible conduct rules may tidy up the worst behaviour, but conduct rules do not create competition. And freeing up land for overseas investors in this industry is a fix for the wrong problem.
This is where the catchword of the month “optimism” starts to look thin. We were told, not too long ago, all options were on the table.
Finance Minister Nicola Willis talked tough. Structural separation was on the table if she didn’t see a shift downwards in prices consumers were paying.
A supermarket break-up including retail and importantly wholesale, hovered in the political air as a credible threat.
Briefly, consumers detected a pulse of optimism: perhaps this time the Government would move beyond sensible and into the realm of courageous.
But no, optimism has been smothered.
The do-nothing option dressed as caution, process, evidence, being kind to overseas investors, and patience is still do nothing. Each step can be defended as sensible.
However, taken together they deliver precisely what the duopoly wants: delay without disruption.
Consumers do not shop in regulatory frameworks.
They shop in stores.
They see the price of butter, milk, mince, fruit, vegetables, cereal and nappies.
They see specials that feel less special and supermarket profits hard to reconcile with a cost of living crisis.
They may accept regulation as a sensible step. But sensibility that never reaches the checkout looks less like good governance and more like managed disappointment.
The Grocery Action Group is not seeing enough reason for optimism.
It has argued planning reform and enforcement are not enough on their own. Only meaningful structural reform will deliver genuine relief at the checkout.
Impatience is not unreasonable when the problem has been diagnosed and re-diagnosed endlessly while households have no choice but to keep paying.
Two minor parties, NZ First and The Opportunities Party, have launched policies calling for the break-up of the supermarkets.
NZ First is promising legislation to break up Foodstuffs (Pak’nSave, New World and Four Square) into two nationwide co-operatives, and the Opportunities Party will give the Commission the tools it needs to break up the duopoly.
If they have leverage around the Cabinet table after the November election, then optimistically that matters.
It keeps the structural question alive. It also suggests voters may yet force the issue if major parties continue to prefer sensible but ineffectual regulation over hard choices.
But optimism should not be confused with hope as a substitute for action. A policy promise only matters if it survives coalition bargaining, industry lobbying and the comfort of the status quo.
The Commerce Commission’s latest strategy is sensible. It may expose behaviour that deserves exposure. It may support enforcement.
It may make the wholesale market less opaque and less tilted towards the incumbents. Releasing land might be sensible too. But if the goals are lower prices, more choice, more innovation, better nutrition and a grocery sector that works for consumers, sensibility alone is not enough. Sensible is the floor, not the ceiling.
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