Consumer NZ, Food & Grocery Council tell Parliament to bust supermarket duopoly

By Taroi Black

Sheree Stephens is a teacher and mother in South Auckland who worries every time she shops whether she has enough left over to save.

That’s because the cost of an average household shop for groceries equates to 15-20% of income for median or lower-income earners, according to data from Stats NZ.

Every week Stephens spends $250 on groceries, most on fresh produce out of her weekly pay packet to keep her and her child fed.

But she believes supermarkets are holding customers like her for ransom as groceries continue to go up, even in Covid-19. “They're basically stealing my money - although I'm on a good wage I still feel like I’m living poor because most of my pay goes on food,” she says.

“So it's time for a change, I feel.”

Consumer NZ and the NZ Food & Grocery Council sympathise with Stephens and are pushing Parliament to break the hold of two food companies that control supermarket ownership and food prices in New Zealand.

The push could mean all the difference for New Zealand households worried about rising food costs.

“Supermarkets are crucial to our communities and economy – but the duopoly is bullying suppliers, even large ones, and consumers are worse off in terms of price paid at the checkout, choice and innovation,” New Zealand Food & Grocery Council chief executive Katherine Rich says.

“With the lack of any real competition between the two supermarket chains, they’ve been able to maintain staggering profit margins which are not enjoyed anywhere else in the world.”

The Commerce Commission has recommended a raft of changes to make this sector fairer. Some of their ideas are forcing the supermarkets to sell their land banks, letting in a third player, introducing a mandatory industry Code of Conduct, and introducing unit pricing.

But Consumer NZ chief executive Jon Duffy doubts Parliament will take action on the Commerce Commission's preliminary findings, which will be presented next March.

“Both consumers and suppliers are being held to ransom by the duopoly of Foodstuffs and Woolworths NZ,” Duffy said.

“If there were more players in the market they would be better at competing to offer better prices and better services to consumers.”