Speaker Gerry Brownlee tried to quell the hubbub with a bit of humour: \u201cI know that a topic like spaghetti excites this House. You add a bit of pineapple and the place is out of control.\u201d<\/p>\n
But National was deadly serious. It has just released its election supermarket policy to separate Pak\u2019nSave from New World and Four Square in the Foodstuffs chain, pending a green light from the Commerce Commission. <\/p>\n
The objective is to create two large competitors to the Australian-owned Woolworths chain.<\/p>\n
Brewer said earlier in the week that food price inflation was down to 1.9% in the year to July 2026, which was better than the 12.5% under Labour in the year to June 2023.<\/p>\n
In the three years to June 2026, under the National-led Government, cumulative food inflation had been 6.8%, but in the three years to June 2023, under Labour, it had been 21.9%.<\/p>\n
However, National\u2019s main weapon in the food wars is Finance Minister Nicola Willis, and she had done her spaghetti research.<\/p>\n
She pointed out that in a single 12-month period of the last Labour Government, that same tin of spaghetti had gone up 35.4%.<\/p>\n
\u201cIf members opposite wish to cherry-pick price increases for particular goods, including mince, including bread \u2026 then they should be aware that two can play at that game.\u201d<\/p>\n
Willis added eggs and chicken to her list of items that had fallen in price, by 15.5% and 4% respectively.<\/p>\n
Williams raised her a block of butter, which had gone up by 88%, and bread, by 72%.<\/p>\n
As Labour\u2019s consumer and commerce spokeswoman, Williams is Labour\u2019s main weapon on competition policy.<\/p>\n
On Thursday, she announced a major policy making price-gouging unlawful in sectors providing essentials such as food, power, transport and fuel.<\/p>\n
And she dismissed National\u2019s supermarket demerger as just another review.<\/p>\n
\u201cIs that what Kiwis deserve \u2013 one cent off a tin of spaghetti and a letter from National to the Commerce Commission asking them to do a review?\u201d<\/p>\n
In their attacks and counter-attacks over the price of food, they were relying on the Food Price Index, a monthly measure of food-price movements by Statistics New Zealand.<\/p>\n
Labour’s Arena Williams (left) and National’s Nicola Willis rolled out warring figures.<\/p>\n
The food price index measures more than 145 items of food in five different categories: fruit and vegetables; meat, poultry and fish; grocery food; non-alcoholic beverages; and restaurant meals and ready-to-eat food.<\/p>\n
It forms part of the consumer price index alongside costs such as rents, rates, power prices, transport, fuel, clothing, goods, services, health and education.<\/p>\n
Instead of looking at food prices over one, two or three years, Herald investigative data journalist Chris Knox has looked at what has happened to the price of each of the food items over 10 years to see which had gone up the most and least (July 2016 was the starting point).<\/p>\n
Overall, food prices rose by 42.8%, less than wages, although there are unders and overs within the food basket.<\/p>\n
During that same 10-year period, wages rose by 50.6%, according to the hourly wage in dollars (private sector, ordinary time) from Quarterly Employment Survey (Stats NZ) figures, displayed on the Reserve Bank website.<\/p>\n
Some other notable points about the movement in those 10 years:<\/p>\n
The highest increase was a 500g block of butter at 157%.The next biggest increases were kiwifruit, 155.2%; corned beef, 153%; canned salmon, 133.9%; eggs, 125.2%; bread, white sliced, 120.4%; pumpkin, 118.2%; dried apricots, 105%; kumara, 93.3%; and sultanas, 86.5%.Fruit and vegetables have gone up 42.5%.The peak increase in fruit and vegetables was 53% measured in June 2023, four months after Cyclone Gabrielle. Meat, poultry and fish have gone up 39.8%.Restaurant meals and ready-to-eat food have gone up by 51.1%, the only category in the index to have risen higher than wage growth over the same period.The biggest drop in price over 10 years was in lettuce, 29.9% less than in 2016.The smallest price increases over 10 years were onions at 2.5%; chicken breast at 2.5% and chicken pieces at 3.5%.<\/p>\n
Data journalist Knox said that generally, wage growth grew faster than food price inflation. Since the year 2000, only in seven years had food price inflation exceeded wage growth: 2001, 2002, 2008, 2009, 2011, 2020 and 2023 (comparing the annualised rate for the second quarter of each year).<\/p>\n
Even if food prices were below wage growth, they increased faster than normal during the 2022-2023 years.<\/p>\n
\u201cAnd the average never goes back down again. So for a lot of people, there is still the sense that five years ago, this thing was a lot cheaper.\u201d<\/p>\n
He noted that the price of avocados had gone down.<\/p>\n
\u201cThat\u2019s good for millennials buying houses,\u201d he quipped.<\/p>\n
But many staples had gone up over the 10 years:<\/p>\n
Eggs 1 doz 125.2%Bread 120.4% Pumpkin 118.2%Cheese 1kg cheddar\u00a075.2%Cabbage 74.7%Potatoes 1kg 72.5%Beef mince 71.4%Apples 63% Milk 2 litres 56.6%Yoghurt 54.1%Cornflakes 49.1%Bananas 42.5 %Sausages 44.5%Flour 13.3%<\/p>\n
The price of spaghetti (for a 420g tin) has gone up 31.6% over the 10 years. It was $1.55 in 2016 and $2.04 in 2026.<\/p>\n
The food price index suggests that when Arena Williams referred to a 1c drop in a tin of spaghetti, she was comparing today\u2019s price with that in December 2023, $2.05, the first month of the coalition Government\u2019s term.<\/p>\n
The price dropped to as low as $1.29 in September 2019. It has gone up and down with regularity but overall on an upward trend.<\/p>\n
Willis and Prime Minister Christopher Luxon on Wednesday announced their proposal for the forced demerger of Foodstuffs and, with it, a cost-benefit analysis (CBA) by Sense Partners commissioned by the Ministry of Business, Innovation and Employment.<\/p>\n
Modelling in that report suggested the benefit from supermarket separation would be about $1000 for higher-income households \u2013 because they spend more on groceries \u2013 but lower-income households would benefit more as a percentage of income, at about $500 a year.<\/p>\n
The consumer benefits over 20 years could amount to $12.6 billion.<\/p>\n
Grocery prices were not projected to fall but the rate of increase was expected to slow.<\/p>\n
In announcing the policy, Willis highlighted the modelling that projected a fall in grocery prices \u201cby 3.5% lower than they otherwise would be one year after separation, and around 5% after six years\u201d.<\/p>\n
Nicola Willis and Christopher Luxon at their supermarket policy announcement. Photo \/ Mark Mitchell<\/p>\n
The Commerce Commission in 2022 concluded that the lack of competition allowed supermarkets to reap excess profits of $1 million a day.<\/p>\n
Willis\u2019 policy document said that in 2025, Foodstuffs\u2019 net profit after-tax margin was 4% in its North Island co-operative, 3% in its South Island co-operative and, by comparison, 2% to 2.5% in major Australian supermarkets.<\/p>\n
According to the most recent Grocery Annual Report, released in June, there are 757 regulated grocery retailers including 219 Four Squares (162 in the North Island and 57 in the South Island); 148 New World stores (105 in NI and 43 in SI); 59 Pak\u2019nSave stores (47 in NI and 12 in SI); 191 Woolworth\/Countdown stores; and 78 SuperValue\/Fresh Choice stores.<\/p>\n
Williams has said National\u2019s proposal was the wrong type of split and she is expected to announce a specific supermarket policy during the campaign.<\/p>\n
Labour\u2019s price-gouging policy is similar to a bill drafted by the Green Party and which replicates a law in Australia that took effect on July 1. It applies to its two biggest supermarkets, Coles and Woolworths, and sets penalties for excessive pricing at $10 million, three times the value of the commercial gain or 10% of turnover in the preceding 12 months.<\/p>\n
The law does not define excessive pricing above a reasonable margin, but will allow principles to develop through case law.<\/p>\n
Willis this week dismissed Labour\u2019s price-gouging policy and Australia\u2019s price-gouging law, even though it has been in effect for less than three months.<\/p>\n
\u201cWhile banning price gouging is a superficially appealing slogan, it simply wouldn\u2019t work because it does not address the underlying issue driving higher prices: a lack of competition,\u201d Willis said in Parliament.<\/p>\n
\u201cThe Australian experience is instructive in that it has no fixed threshold for what constitutes an excessive price. The regulator has to assess the cost of supply, what constitutes a reasonable margin, and the circumstances surrounding each individual product.<\/p>\n
\u201cThat likely means hundreds and hundreds of regulatory and legal disputes over what constitutes a reasonable price for individual products, and millions being spent on lawyers and consultants with likely no benefit to consumers.\u201d<\/p>\n
Policies announced so far \u2026<\/p>\n
NATIONAL<\/p>\n
FORCED SEPARATION: Require the Commerce Commission to decide within six months whether to break up Foodstuffs into two co-operatives, separating Pak\u2019nSave stores from New World and Four Square to create three competing chains (with Woolworths).<\/p>\n
LABOUR<\/p>\n
PRICE GOUGING: Give the Commerce Commission the power to investigate and prosecute companies with substantial market power (food, power, fuel, transport, telecommunications, banking and insurance), and, similar to the British model, give consumer groups the power to pursue cases too. Supermarket policy still to come.<\/p>\n
GREENS<\/p>\n
PUBLICLY OWNED SUPERMARKET: Require the present duopoly of Foodstuffs and Woolworths to sell at least 120 of their stores and distribution centres for a new chain, KiwiMart, in public ownership. Also supports giving the Commerce Commission powers to crack down on price gouging with penalties up to $10m, three times the value of the commercial gain or 10% of turnover.<\/p>\n
ACT <\/p>\n
FAST-TRACK CONSENTING: Introduce a fast-track one-stop-shop approval process for grocery development to streamline rezoning, consenting, and investment approvals. Would allow new entrants planning at least 10 stores to get approval within months. More competition policy to come.<\/p>\n
NZ FIRST<\/p>\n
FORCED SEPARATION: Break up Foodstuffs into two co-operatives: one for New World and Four Square, and another for Pak\u2019nSave. Both would compete with Woolworths. Beef up the investigative and enforcement powers of the Commerce Commission to give it powers to impose penalties similar to Australia, including fines of up to $10m, three times the gain or 10% of turnover.<\/p>\n
TE P\u0100TI MAORI<\/p>\n
KAI CREDIT: For people earning less than $60,000, provide an income tax kai credit worth up to eight weeks of free kai each year \u2013 to benefit an estimated 3 million people.<\/p>\n
OPPORTUNITY<\/p>\n
BEEF UP COMCOM: Break up dominant companies where competition has clearly failed. Empower the Commerce Commission to ask the High Court to order the sale of assets, separate business operations, or require access to key infrastructure when market power has become too concentrated and other remedies have failed.<\/p>\n","protected":false},"excerpt":{"rendered":"Speaker Gerry Brownlee tried to quell the hubbub with a bit of humour: \u201cI know that a topic…\n","protected":false},"author":2,"featured_media":604647,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[95,1975,1558,138,36743,537,380,219,564,2944,130,13631,111,139,69,22213,18154,3333,29056,4520,3953,223],"class_list":["post-604646","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-and","tag-at","tag-been","tag-business","tag-checkout","tag-crisis","tag-decade","tag-economy","tag-food","tag-inside","tag-more","tag-never","tag-new-zealand","tag-newzealand","tag-nz","tag-our","tag-political","tag-price","tag-proposed","tag-solutions","tag-spaghetti","tag-the"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/604646","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=604646"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/604646\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/604647"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=604646"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=604646"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=604646"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}