New Zealand Pressed To Fix Duopoly In Supermarket System
The New Zealand government is under increased pressure to fix the country’s ‘broken’ supermarket system from both the food industry and consumer associations, both of which are demanding that the current duopoly be abolished and the market opened up in a similar vein to the telecom sector.
Photo Insert: A Countdown supermarket store branch in Taupo, New Zealand
New Zealand’s supermarket sector is currently under government review, with preliminary findings by the Commerce Commission having concluded that the current state of competition is not working well for consumers and that the supermarkets are making ‘persistently high’ profits and describing the sector as a duopoly dominated by Foodstuffs and Woolworths NZ.
The commission’s report called for the entry of more new retailers into the market to improve competition, as well as the establishment of a New Zealand Grocery Code of Conduct to ensure appropriate market conduct and fairness.
The Code of Conduct debate has already been brought to the parliamentary debate stage by the food and grocery industry association New Zealand Food and Grocery Council (NZFGC), and the council’s Chief Executive Katherine Rich is leading the call for this to be formally approved.
“[New Zealand has] the most highly concentrated supermarket ownership in the world with over 95% controlled by two retailers, [and with] that level of dominance [there needs to be] a clear baseline for acceptable business conduct, [which] a code would provide a clear framework for,” Rich told FoodNavigator-Asia.