Monopoly games

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    There was a jaunty little missive in a grocery aisle recently, telling me that the pack of cut-price bacon (which I wasn’t about to buy) was made in New Zealand from pigs slaughtered in any one or more of the following countries: Australia, Belgium, Denmark, Finland, France, Germany, Ireland, Netherlands, Poland, Spain, Sweden or the UK.  Nor, it warned, had the animals necessarily been reared to the sort of standards one might hope for.

    The shocking truth is that 60 percent of all pork sold in New Zealand is imported and it’s an even higher percentage if you include bacon and ham.

    It’s cheaper. And not subject to such rigorous protections from local authority and industry oversight.

    Two aisles over, in a fit of nostalgia and with the luxury of shopping for one, I bought a mango that turned out to have travelled from Peru.

    It’s pretty plain that this year, a lot of people are going to go hungry on a global scale, perhaps like never before. Here in Aotearoa, despite growing enough food for 10 times our own population, we aren’t immune from disrupted supply chains including from China.

    Backfilling supermarket shelves with food produced closer to home and weaning ourselves off cheap, manufactured overseas food brought in by monopoly supermarket players isn’t going to happen overnight, not least because New Zealand growers, like our once-strong manufacturing sector, have fared badly from monopoly buying practices. Meantime, in March, prices for fruit and vegetables rose by 18 percent.

    No wonder that one in three of us now distrusts the supermarket industry even more than the banks (though it’s a close-run race with a mere three percentage points between them).

    We all watched the banks post megalithic profits after riding out the Covid pandemic without putting their hands in their own pockets even for a single week of mortgage repayment relief. All while easy money flowed out to power exponentially rising house prices.

    By comparison, the perfidity of the supermarkets is only now coming home to roost, shocking us with the extent that they, and Countdown in particular, have hollowed out our food supply chains and resilience, pulverised smaller suppliers and tied up enormous amounts of valuable land.

    “It is beyond debate that competition is not working well for consumers in the grocery sector,” Consumer NZ’s chief executive Jon Duffy said this week as the government went beyond its Commerce Commission’s recommendations in the final report on the sector, progressing a mandatory wholesale access regime to make way for emerging grocery retailers.

    The clampdown will include an independent industry regulator, compulsory unit pricing and a mandatory code of conduct for grocery retailers’ dealings with suppliers that comes with an independent dispute resolution scheme. New rules will include yearly reviews – more frequent than the three-yearly reviews recommended by the commission, a wholesale grocery access regime with a mandatory approach providing a ‘backstop’ for the voluntary scheme recommended by the commission and new transparency requirements for loyalty schemes, data collection and use.

    Grocery suppliers will be allowed to collectively bargain, with an exemption from the Commerce Act provisions which currently prevent it, and the government has already been progressing legislation curbing the use of restrictive land covenants which currently prevent new competitors getting a foothold. The bill is now at the select committee stage.

    Announcing the clampdown, Commerce and Consumer Affairs Minister David Clark said the clear message to supermarket retailers was to be prepared to change quickly to increase competition, and be ready for regulation.

    “The duopoly needs to change, and we are preparing the necessary legislation to do that.”

    The Commerce Commission’s report had found supermarkets were making $1million a day in excess profits, and given recent cost of living increases the government could not delay further, he said. “Both supermarkets know what is expected from them and the length of time we are prepared to give them to change before regulation kicks in.”

    “Our supermarkets know they’re in the spotlight, and we’ve recently seen some posturing around price rollbacks. However, it doesn’t fix the systemic problem at large – which is a lack of genuine competition in the sector.”

    The supermarkets would need to open up their wholesale operations to competitors at a fair price, the Minister said, and if they fell short, a mandatory regime would force them to. “We are not afraid to unlock the stockroom door to ensure a competitive market.”

    It’s a great start, and in the meantime, we’re luckier than most here on the island with a good array of independent grocery suppliers, a butcher and oyster outlet, fruit and vegetable stores, an iconic Saturday market and our own back yards to pick from.

    • Liz Waters

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