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Newsroom
6 days 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.
Otago Daily Times
30-04-2025
- Politics
- Otago Daily Times
Letters to the Editor: Wānaka, Monowai and speed limits
Lake Wānaka. PHOTO: RAWAN SAADI Today's Letters to the Editor from readers cover topics including lack of council planning in Wānaka, the Monowai power station, and the DCC's imposition of 30kmh speed limits. A Wānaka welcome is not extended to us all Despite its million-dollar houses, Lake Hāwea has a failing sewerage system. This was known before permission was granted to build 400 more houses, one among many housing developments being built in the township right now. Perhaps the subject of sewerage is too gross for Queenstown Lakes District Council councillors and Wānaka board members, too smelly for their hot-house plant sensitivities. Easier to blame the lack of planning on council operations. Perish the thought of taking responsibility for what happens in the organisation they are elected to guide. Could it be they stood for election with pleasant visions of tourism promotion? Did they dream of prettying-up Wānaka lakeside, rather than having nightmares of sewage with nowhere to go? Positive image is all. Take the McDonald's location issue, strident concerns about the architecture and unhealthy food. Come on. So, our supermarkets and Night 'n Day store sell only healthy food? And their buildings were designed by Gaudi? McDonald's is considered lower class; that's why it was shoved out of sight. Wānaka area welcomes residents who own outsize houses, outsize cars and outrageous rental properties, and, of course, tourists with money. There is no embrace of people struggling to pay extortionate rent, or mortgages for that matter. Renters are necessary to service wealthy residents and tourists, but their struggles are ignored. Social housing? That would suggest Wānaka depends on poverty for its fraudulent fun-town identity. Unless our elected representatives want to continue to be dismissed as irrelevant, they must take responsibility . . . and accept it is for councillors to make decisions for council officers to carry out. Christopher Horan Lake Hāwea Pro-democracy The messy Treaty Principles Bill was put to bed after National and New Zealand First said that they would not support it. The prime minister argued that the Bill only got to the select committee stage, as this was part of the coalition agreement between Act New Zealand and National. It is interesting that New Zealand First would not support the Bill, as as part of its coalition agreement with National has a clause which states: "Pro-democracy — upholding the principles of liberal democracy, including equal citizenship, parliamentary sovereignty, the rule of law and property rights, especially with respect to interpreting the Treaty of Waitangi." This clause, by the way, is also in Act's coalition agreement with National and has exactly the same wording. It would be a real worry to those who opposed the Treaty Principles Bill to see National honouring the pro-democracy clause and how and when they intend to do it. Ross Davidson Wakari Monowai power station. PHOTO: LAURA SMITH How about you bring lake back to what it was? This is another view of the Monowai power station 100-year anniversary (ODT 28.4.25). In the ratio of environmental pain for energy gain, the scheme must rank among the worst in the world. The pristine Lake Monowai was raised, with some 50km of shoreline forest drowned and all the lake beaches submerged. Why? For the operational convenience of having storage water for the tiny Monowai station. Is it really necessary for Pioneer Energy to keep Lake Monowai in a flooded state? Pioneer has an opportunity to enter the history books by removing the Monowai dam and restoring the lake. What a great anniversary that would make 100 years from now. Earl Bardsley University of Waikato Headline spurned "Keep away from foolish and ignorant arguments — they end in quarrels" (Opinion 256.4.25). Really ODT? Washing a council's dirty linen in public then hanging it on [the] line is one of the very few ways of holding councils to account. The advice from the ODT is a bit like ignore the wash cycle — go straight to spin. No thank you. Gerrard Eckhoff Alexandra Why put stop sign up on speed limits? Page 4 of the ODT (28.4.25) indicates that Dunedin City Council staff have amongst themselves decided to retain their currently imposed 24/7 30kmh speed limits around schools. Everyone recognises the need for suitable restrictions and a safe environment around schools at pick-up/drop-off times, with the mass release of (mostly) excited children, not to mention their caregivers parked on yellow lines. However, there seems little merit and, I suspect, little community support in applying 30kmh restrictions 24/7. This reduces traffic at all hours to a road works speed, or that of a funeral cortege, outside of peak school hours when there is a complete absence of extraordinary risk. These are, after all, commonly thoroughfares with traffic flow a primary intent and school safety needs should be contained to the brief periods they exist. At what point do council staff consult the community in these matters? They don't ever appear to have done so in the wider sense and seem to have little mandate for their 24/7 rulings. The same has applied to other ad hoc speed restrictions in some suburban areas and distributor routes, unrelated to schools, with no discernible need to the extent applied, generally unpopular and rather tellingly widely unrecognised by drivers. It is unclear whether these are to be reviewed, but by and large they should be thrown out and hopefully in most cases will be, in accordance with current government policy which at least carries some measure of mandate, contrary to council staff who, at present levels of consultation, do not. W Sharp Maori Hill Address Letters to the Editor to: Otago Daily Times, PO Box 517, 52-56 Lower Stuart St, Dunedin. Email: editor@
