Conflict means grocery regulation off limits for new Commerce and Consumer Affairs Minister Scott Simpson

Scott Simpson says he will have nothing to do with grocery sector regulation.

The newly appointed Commerce and Consumer Affairs Minister is recusing himself from decisions concerning one of the country’s least competitive business sectors.

Scott Simpson will have nothing to do with grocery sector regulation because a close family member owns a supermarket.

Finance and Economic Growth Minister Nicola Willis will instead take responsibility for matters related to the sector, which might otherwise have made up a decent part of Simpson’s job.

A spokeswoman for Prime Minister Christopher Luxon said Simpson, who was appointed to the role just over a week ago, proactively identified the conflict of interest.

“To ensure this conflict is managed appropriately in accordance with the Cabinet Manual, with the Prime Minister’s agreement, Nicola Willis will act as Commerce and Consumer Affairs Minister on all matters related to grocery regulation,” the spokeswoman said.

“Our Government is laser-focused on helping Kiwis keep more cash in their back pocket and part of that is driving competition in the grocery sector. Nicola Willis will be a strong advocate for this.”

Simpson was appointed Commerce and Consumer Affairs Minister on February 24, after Andrew Bayly resigned from his ministerial portfolios for being “overbearing” towards a staffer, clutching their arm during an “animated” discussion.

Even before the incident, Willis started fronting high-profile competition-related issues.

Addressing those at an economics conference at the University of Waikato last month, she said she was putting Foodstuffs and Woolworths “on notice” and was willing to “crack down on predatory pricing” and ensure competitors had “fair access to products”.

Speaking to media afterwards, Willis said she was willing to “do a deal” with any supermarket company eyeing an entrance into the New Zealand market.

She said she was happy to pave the way for a company to disrupt the duopoly that dominates the sector, but did not commit to making any regulatory changes.

“I want to get on and work with a third entrant to get them in the door, and that will need a bespoke arrangement that will be bespoke to that entrant,” she said, saying they may, hypothetically, need help with the Overseas Investment Act, access to capital or land, or particular terms around their access to the wholesale market.

“I’m opening the door. I’m saying let’s do a deal. I’m willing to give them the VIP treatment, because you know who wins from that? New Zealand shoppers.”

Willis knew of companies possibly interested in entering the market, but would not say who they were for commercial reasons.

Her comments followed the Commerce Commission spending more than a year investigating the level of competition in the grocery sector.

Finishing its study in March 2022, it concluded competition “was not working well for consumers” and New Zealand grocery prices were high by international standards.

The Labour Government responded by banning supermarkets from using restrictive covenants on land and leases to prevent competitors from setting up shop in certain suburbs and shopping centres.

It introduced an industry regulator, mandatory code of conduct, and compulsory unit pricing on groceries so consumers could easily compare prices.

In 2023, it also created a Grocery Commissioner role, appointing Pierre van Heerden to the job for five years.

The Labour Government looked into requiring dominant supermarket companies to sell retail stores to make way for new players, but did not push ahead with that.

Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in government and Reserve Bank policymaking, economics and banking.