Minister expects Landcorp to deliver bold turnaround plan
State-owned Enterprises Minister Simeon Brown is continuing to put pressure on Landcorp to lift its commercial performance.
In his letter of expectations to the Crown-owned farming company – which trades as Pāmu – Brown noted its five-year average total shareholder return and return on equity
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Newsroom
12 hours ago
- Newsroom
Crackdown on $15b supermarket giants' opaque pricing ‘doesn't go far enough'
Analysis: A Government attempt to break open supermarkets' chokehold on grocery wholesale 'hasn't worked as intended', the Commerce Commission admits. That may be an understatement. According to the general manager of the family-owned Night 'n Day grocery chain, it's failed dismally. Foodstuffs and Woolworths sold only $7 million of groceries to smaller retailers through the regulated 'fair price' wholesale scheme last year, Matthew Lane says. Night 'n Day wants to offer competitive grocery prices. It's grown from one corner store in Dunedin to a nationwide chain of 52 grocery and convenience stores. Lane says it's the third-biggest grocery chain in New Zealand, after the two big players – but it's not even close to being able to break the duopoly's market control. One of the biggest challenges for smaller retailers is accessing grocery supplies at a good price. Many dairy owners are forced to queue at the checkouts of the big supermarkets to buy their supplies at retail prices, then mark up those prices further to turn a dollar. To help address that, the previous government applied some arm-twisting, to get the big chains to open up their wholesale operations to smaller competitors. Finance Minister Nicola Willis now says she's turning her attention to the supermarket sector, and all options are on the table, including breaking up the big companies – either forcing them to divest some of their stores, or separating their wholesale and retail businesses. In a dramatic development on Thursday morning, Grocery Commissioner Pierre van Heerden has given the two big chains just 12 months to clean shop – or face regulation. Lane welcomes the preliminary findings from the commission's wholesale supply inquiry, recommending the major supermarkets expand their wholesale product range and pass on promotional funding to allow other retailers to access lower prices. Last year, as an example, Foodstuffs had sold just $1.3m worth of goods through the scheme. It approved only 41 wholesale customers to purchase from its wholesale service – and Night 'n Day was not one of them. So Lane's also cautiously supportive of Government attempts to woo one of the big foreign supermarket brands like German-owned discount grocer Aldi to these shores – but he says ministers should be looking closer to home. 'They shouldn't put all their eggs in one basket,' he says. 'If we can develop grocery competition locally, well, I think that's actually a better result for all parties – especially opening the door to someone that's already established in the market. 'We can control our destiny. We're here in the market, and we're wanting to grow.' The grocery commissioner says the current grocery market is not serving Kiwi consumers well. 'The status quo lets a few major players set the rules for the rest of the industry which is negatively impacting consumers, new and expanding competitors, and small suppliers.' Van Heerden criticises Foodstuffs, Woolworths, and some of the large national and multinational suppliers, whose significant market share allows them to influence the settings of the market. His draft report proposes to change the Grocery Supply Code to stop the supermarkets imposing a confusing array of charges on suppliers – they're typically forced to pick up the tab for supermarket costs like stocking shelves, setting up displays, and promoting their products. Van Heerden also wants to eradicate the $5b in rebates, discounts and promotional payments paid by the big suppliers to the supermarkets, to put their products 'on special'. 'Competing retailers can't negotiate similar levels of support due to their weaker buying power. 'Consumers lose out because prices jump around more. This can mean the average price is more expensive and it's harder for consumers to assess the value of products.' New Zealand cooperative Foodstuffs is the country's biggest player, with more than 500 Pak'nSave, New World, Four Square and Liquorland stores, as well as wholesalers Gilmours and Trents. It's at war with the Commerce Commission, taking court action to challenge millions of dollars of fines for anti-competitive land covenants, and to overturn the commission's ban on it merging its North Island and South Island businesses. Spokesperson Stefan Herrick says a well-functioning market must support efficient, productive outcomes – and that includes ensuring retailers can negotiate fairly to deliver value at the checkout. The co-op takes its obligations under the new Grocery Supply Code seriously, he says. Any supplier who has an issue should complain through the appropriate channel. 'In our view, the current code has already effectively set the 'rules of engagement' with suppliers. We regularly survey our suppliers to ensure we are working as partners, listening, and constantly improving.' Australian-owned Woolworths NZ, which has more than 185 stores and also franchises 70 SuperValue and FreshChoice stores, has mostly taken a more conciliatory approach. Interim managing director Pieter de Wet says wholesale is a new and fast-evolving area for the company. 'In just three years we've developed a business which provides grocery products to more than 100 retail sites and we have over 60 customers using our service to provide more choices for shoppers,' he says. 'We're working closely with suppliers and wholesale customers.' Both chains say they'll take time to read the draft documents issued by the Commerce Commission in detail, and promise to work constructively with the commission through the submission process.
RNZ News
13 hours ago
- RNZ News
Internal Affairs to have another go at modernising births, deaths and marriages registry
The department will hold a briefing to hear from companies what the options might be later this month. Photo: RNZ / Alexander Robertson After spending $23m but failing to modernise the births, deaths and marriages registry, officials are having another go. The Department of Internal Affairs has written off $22.9m on the project abandoned last year, returned an unspent $58m to the Crown and remains locked in a dispute with the Australian company DWS over the contract it terminated in late 2023. "Although some of the work completed will be able to be used for a future civil registration system replacement project, from an accounting standards perspective, it [decided] should impair (write off) all capital costs incurred to date," DIA told RNZ. But it needs a replacement and is setting out again, tentatively, facing "uncertainty around funding and what a long-term replacement plan would look like". It also faced a "high risk" rating on the project, it said. "As part of the business case process the department would need to provide assurance of how risks could be sufficiently managed or mitigated," it said. The project to replace DIA's old unreliable tech with a new system to give people faster and more secure access to their identity data - among a total 80 million records - was central to a $150m phase of the department's $300m five-year Te Ara Manaaki project. This month the department will hold a briefing to hear from companies what the options might be, while working on a strategic assessment to go to Cabinet. Treasury last year imposed more checkgates that public sector projects must pass through, to try to prevent badly thought-out ones getting through. "We are in the early stages of a discovery phase," DIA said. This comes almost three years after it announced it was replacing its existing system and had chosen a vendor it was confident would deliver a robust system. "The new system will be more efficient, secure, and reliable," it said in August 2022. Some of the work done since 2022 would not be wasted, which should cut costs for a replacement, it said. This included work done on design, improving data quality, the data migration process and testing and delivery frameworks. The department offered reassurance that the existing system "while ageing, is stable and maintenance work continues to be undertaken to ensure secure, functional and legislative compliant systems remain in place while a new long-term replacement plan is progressed". It still had vendor support for the old system, DIA said. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Scoop
13 hours ago
- Scoop
Gas Data Proves Government Correct To Act Now
Hon Shane Jones Minister for Resources New figures released today showing a decline in New Zealand's gas reserves is a stark reminder why the Government is taking decisive action to bolster the industry and seek more investment in exploration and production, Resources Minister Shane Jones says. 'New Zealand needs a secure supply of affordable and reliable gas – for industry to continue and for Kiwis to keep the lights on. A 27 percent year on year decline in our natural gas reserves is further proof that the Coalition Government has made the right decisions in overturning the oil and gas ban, and is willing to become a cornerstone investor in gas production,' Mr Jones says. 'We simply cannot allow the de-industrialisation of New Zealand to continue. Our manufacturing sector, particularly in the regions, which rely on gas are at the mercy of the market. Rising gas prices are putting increasing pressure on manufacturers and are harming the competitiveness of our businesses, risking their viability. 'As an island nation we should be taking full advantage of our indigenous gas reserves to power our homes and businesses. The idea that we could transition to 100 percent renewable energy without the back-up of any kind of thermal energy is as naïve as it is unattainable. 'That's why the Government has made some bold decisions about how we can arrest the impending degradation of our energy system. It is not too late to turn around our fortunes in this area. 'The Government has committed, through Budget 2025, $200 million over four years for Crown co-investment in new domestic gas field developments. This funding will allow the Government to take a commercial stake of up to 15 percent in new gas projects that feed the domestic market, helping to reduce sovereign risk and attract offshore investment. 'As well as removing the exploration ban, the Crown Minerals Amendment Bill which comes back before the House soon, better balances the regulatory burden and risk of decommissioning and gives the regulator more flexibility in how exploration permits are issued, giving the sector confidence to get to work.' Other action the Government has taken includes the Investment Boost policy announced in the Budget.
