No respite in near future from food price hikes, economist says

By Stefan Dimitrof

The government is creating a Grocery Commissioner and an industry code of conduct to ensure prices at the supermarkets are not ripping shoppers off.

The new watchdog will be housed at the Commerce Commission, which earlier this year wrote a damning report about prices and competition in the supermarket sector.

Economist Brent Reihana (Ngāpuhi, Whakatōhea) said it was inevitable that an independent office monitored the supermarket industry. “It’ll be really interesting to see what the wash-up of that code of conduct is.”

'Price gouging'

Reihana said that the current price-gouging of up to $1 million a day in excessive profits (argued in the Commerce Commission report) has called for the watchdog to be created.

Reihana thinks that the person who is hired as the watchdog needs to be someone who has experience in the industry and understands how it functions. “It’s not something that you can fall into or come into from the outside.”

Reihana suggests that the person should have experience being a supplier and a retailer.

'Flow-on effect to the consumer'

Reihana said that there would need to be a code of conduct and it would have impact. “First off, it will impact the suppliers. They will have freedom of choice and freedom of movement. It will allow other suppliers into the market, which closes down those barriers.”

Reihana thought there would be a flow-on effect to the consumer but it wouldn’t be something likely to happen soon.

Reihana said if the commissioner did have the power and the code of conduct allowed that to happen, he hoped the changes that the commissioner made were advertised. “So that it gives more suppliers the confidence to enter the market and then the trickle down to the consumer will be immediate.”

But Reihana doubted there would be any respite from high prices and inflation in the immediate future.