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Newsroom
a day ago
- Business
- 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.
Herald Sun
2 days ago
- Business
- Herald Sun
Retail giants snub Tasmania: Why Aldi, Costco resist expansion
Tasmanians have long been yearning for the arrival of Aldi and Costco, two retail powerhouses known for their competitive pricing and diverse offerings. Yet, despite the island state's growing demand, both companies remain conspicuously absent, leaving locals to question why they are being overlooked in the retail landscape. Aldi, the German-owned supermarket chain, has made its mark across Australia since 2001, boasting over 590 stores nationwide. Promising 'Australia's lowest prices', Aldi has become a staple for budget-conscious shoppers. However, Tasmania remains one of the few jurisdictions, alongside the Northern Territory, where Aldi has yet to establish a presence. The Greens have now stepped forward with a $30 million plan to entice Aldi to Tasmania, arguing that the supermarket's entry would drive down grocery prices and invigorate the local economy. This initiative reflects a strategic push to provide Tasmanians with more affordable shopping options and stimulate job creation. MORE NEWS Inside Australia's haunting mall mystery What ever happened to Hog's Breath Cafe? Remembering Sizzler: The rise and fall of a dining icon Meanwhile, Costco, renowned for its bulk-buying model and expansive warehouse stores, also remains absent from Tasmania. Ray White Group head of research Vanessa Rader said the lack of both Aldi and Costco had left Tasmanians with limited choices and potentially higher grocery bills compared to their mainland counterparts. However, she adds the reason for their absence was perhaps easy to explain. 'It all comes down to population and scale…they just couldn't make it work there because it does need the additional kind of industry or what not,' she said. 'With Costco, I don't think (the Tasmanian) market would sustain any more than one store, so that, plus the additional requirement for distribution…makes it not a viable situation. 'Aldi is a little bit different because you already have your Woolies and Coles, which means the population just isn't there to compete with what's already there 'I think it's a market that's already at capacity in terms of what their requirement for supermarkets is. So I think Aldi is thinking that the market is quite small…so unless there's a change in that population landscape, things aren't going to change and then you also have geographical difficulties in getting stuff there.' Greens announce $30m plan to entice Aldi to Tasmania While logistical concerns, market size, and population density may be factors, the persistent demand from locals suggests a ripe opportunity for expansion. As the situation unfolds, Tasmanians are left wondering if and when these retail powerhouses will recognise the untapped potential of the island state. The Greens' $30 million proposal stands as a significant gesture towards bridging this retail gap, but whether it will be enough to sway Aldi and Costco remains uncertain. Tasmanian Greens Senator Nick McKim, who is the party's economic justice spokesman, announced the plan in April, saying bringing Aldi to Tasmania would help ease cost-of-living pressures in the state. 'Coles and Woolworths have had it too good for too long, and Tasmanians are paying the price,' he said. 'A lack of competition means shoppers here are paying at least $15 more on a basket of essential groceries compared to Aldi, which adds up to hundreds of dollars a year.' MORE NEWS: Ampol's $20m Land Bonanza: What's Next? Senator McKim said the Greens would launch a $2m supermarket competition review that would determine the barriers preventing discount supermarkets such as Aldi from establishing themselves on the Apple Isle. The party would then provide the state government with up to $28m to support the entry of new competitors in the supermarket sector, which could involve subsidising distribution centres, boosting supply chains, and making government land available to supermarket retailers on a competitive basis. Senator launches petition to being Aldi to Tasmania Tasmanian independent senator Tammy Tyrrell has also pushed for Aldi to head south to the island state, launching a petition that has attracted thousands of signatures. 'They say imitation is the best form of flattery (and) I'm glad the Greens are finally on board my campaign to bring Aldi to Tassie,' she said. 'The more the merrier – if this puts more pressure on Aldi to make the leap across Bass Strait, I'm happy with that. 'The (Australian Competition and Consumer Commission) says bringing Aldi to town saves people an average of $890 a year. That could be the difference for someone keeping their heater on in winter or not.' Tasmanian MP Andrew Jenner from the Jacqui Lambie Network is also calling on the state government to invest $1 million in a study to explore the possibility of bringing a Costco or similar low-cost supermarket chain to the island state. 'Research from consumer group Choice has found that the average cost of groceries in Tasmania is 25 per cent higher than on the mainland, despite Tasmanian wages being an average of 10 per cent lower,' Jenner said. 'The report stated that the lack of ALDI, or equivalent low-cost supermarkets in Tasmania is directly contributing to the higher-than-average grocery prices. 'Bringing Costco, or a Costco equivalent, would directly help alleviate the cost-of-living pressures in a fundamental way.' Aldi has 'no current plan' to come to Tasmania, CEO says A report published last year by consumer group CHOICE found that Aldi was the most affordable supermarket chain in the country, with the total price of an average basket of groceries being $50.79. While Aldi has almost 600 stores across Australia, Tasmania is the only state without one. Even Geelong, which is a similar size to Hobart, is home to Aldi. Speaking at a Senate inquiry in April last year, Aldi CEO Anna McGrath said the chain had 'no current plan' to open a store in Tasmania, citing supply chain 'complexities'. 'That's not to say that we don't continuously review where we may expand in the future,' she said. When asked why Aldi was expanding to other smaller regions but not Hobart, Ms McGrath replied it 'goes back to us having a very different business model'. 'For us, the way that we're able to continue to invest in price is to keep our operating costs as low as possible and having the lowest operating costs in the sector,' she said. 'That means when we're identifying where to expand, we do need to consider the additional costs and complexities that are involved.' The unfolding situation highlights a pressing issue: will Tasmania continue to be sidelined in the retail landscape, or will Aldi and Costco finally answer the call of its residents? The outcome could reshape the state's retail environment and consumer experience for years to come.
Leader Live
14-05-2025
- Business
- Leader Live
Evri merges with DHL UK ecommerce arm to form parcel giant
German-owned DHL Group will acquire a 'significant minority stake' in Evri as part of the deal. The two operations, which will operate as Evri Group, will bring together more than 30,000 couriers and van drivers, and 12,000 further workers. Evri, which was previously part of the Hermes parcel group, was snapped up by US private equity firm Apollo for around £2.7 billion last year. Apollo will remain the majority shareholder in the business. The combined company will deliver more than one billion parcels and one billion letters each year, the firms said. They said the merger will offer 'greater choice and cost-competitive solutions' to businesses and consumers, and expand import and export capabilities. The deal will also see Evri entering the UK business letter market for the first time, bolstering its competition to Royal Mail. Martijn de Lange, chief executive of Evri, said: 'We are excited that DHL ecommerce UK will merge with Evri to bring together two highly complementary UK businesses, committed to innovation and offering customers and clients the best possible service. 'By combining Evri's scale, innovation and DHL ecommerce's best-in-class premium van network, we are creating the pre-eminent parcel delivery group in the UK.' Pablo Ciano, chief executive of DHL ecommerce, said: 'DHL ecommerce and Evri both stand for top service quality, reliability and sustainability, which makes this partnership a great fit for our customers. 'Together, we'll be able to offer more efficient, far-reaching and innovative solutions to keep up with the fast-paced e-commerce market.'
North Wales Chronicle
14-05-2025
- Business
- North Wales Chronicle
Evri merges with DHL UK ecommerce arm to form parcel giant
German-owned DHL Group will acquire a 'significant minority stake' in Evri as part of the deal. The two operations, which will operate as Evri Group, will bring together more than 30,000 couriers and van drivers, and 12,000 further workers. Evri, which was previously part of the Hermes parcel group, was snapped up by US private equity firm Apollo for around £2.7 billion last year. Apollo will remain the majority shareholder in the business. The combined company will deliver more than one billion parcels and one billion letters each year, the firms said. They said the merger will offer 'greater choice and cost-competitive solutions' to businesses and consumers, and expand import and export capabilities. The deal will also see Evri entering the UK business letter market for the first time, bolstering its competition to Royal Mail. Martijn de Lange, chief executive of Evri, said: 'We are excited that DHL ecommerce UK will merge with Evri to bring together two highly complementary UK businesses, committed to innovation and offering customers and clients the best possible service. 'By combining Evri's scale, innovation and DHL ecommerce's best-in-class premium van network, we are creating the pre-eminent parcel delivery group in the UK.' Pablo Ciano, chief executive of DHL ecommerce, said: 'DHL ecommerce and Evri both stand for top service quality, reliability and sustainability, which makes this partnership a great fit for our customers. 'Together, we'll be able to offer more efficient, far-reaching and innovative solutions to keep up with the fast-paced e-commerce market.'
South Wales Argus
14-05-2025
- Business
- South Wales Argus
Evri merges with DHL UK ecommerce arm to form parcel giant
German-owned DHL Group will acquire a 'significant minority stake' in Evri as part of the deal. The two operations, which will operate as Evri Group, will bring together more than 30,000 couriers and van drivers, and 12,000 further workers. Evri, which was previously part of the Hermes parcel group, was snapped up by US private equity firm Apollo for around £2.7 billion last year. DHL will take a minority stake in Evri (Alamy/PA) Apollo will remain the majority shareholder in the business. The combined company will deliver more than one billion parcels and one billion letters each year, the firms said. They said the merger will offer 'greater choice and cost-competitive solutions' to businesses and consumers, and expand import and export capabilities. The deal will also see Evri entering the UK business letter market for the first time, bolstering its competition to Royal Mail. Martijn de Lange, chief executive of Evri, said: 'We are excited that DHL ecommerce UK will merge with Evri to bring together two highly complementary UK businesses, committed to innovation and offering customers and clients the best possible service. 'By combining Evri's scale, innovation and DHL ecommerce's best-in-class premium van network, we are creating the pre-eminent parcel delivery group in the UK.' Pablo Ciano, chief executive of DHL ecommerce, said: 'DHL ecommerce and Evri both stand for top service quality, reliability and sustainability, which makes this partnership a great fit for our customers. 'Together, we'll be able to offer more efficient, far-reaching and innovative solutions to keep up with the fast-paced e-commerce market.'
