“It’s encouraging to see suppliers and retailers work through these sorts of issues, and that is what should happen in a well-functioning market,” van Heerden said.
The watchdog was “extremely concerned” about supply shortages impacting one retailer and acted on it accordingly. While Sanitarium’s response was still under consideration, the Commerce Commission wouldn’t comment further.
Too close for comfort?
Appointed in July, van Heerden was executive general manager of Sanitarium for 10 years from 2007. As a Weet-Bix kid for more than 10 years, are the commissioner’s former ties to the company too close for comfort?
A Commerce Commission spokesperson said van Heerden’s experience was a real asset as he understood and had first-hand experience in the sector, noting he had never worked or held shares in any supermarkets.
“As a previous supplier, his experience is invaluable when monitoring the sector. He has ended his links and obligations with the grocery sector some time ago and the potential for conflicts was considered in the appointment process.”
First on the chopping block
Back to the Weet-Bix saga. A 1.2-kilo box of Weet-Bix is currently priced at $8.20 at Countdown, $8.19 ($6.99 with a Club Card) at New World, and $6 at The Warehouse.
Sanitarium general manager Michael Barton said manufacturers didn’t set retail prices.
“Not forgetting that many Kiwis are battling through the current economic environment, during the last year, Sanitarium has continued to supply over seven million serves of Weet-Bix to the community directly through its charitable programs and partners,” Barton said.
The press release pointed to Sanitarium’s donations to New Zealand’s Food Network website - a non-profit organisation that redirects surplus food from businesses to communities.
There’s an irony in the company’s original plans to scrap supplies to the cheapest Weet-Bix retailer on offer, yet highlighting its charitable endeavours in the same press release.
In other words, who needs to provide Kiwis with the ability to afford cheaper options, if donations can be made in other areas, which just so happen to be great PR?
Pay it forward
Under the name New Zealand Health Association Limited, Sanitarium is listed as a charity on the basis of education, training, research, health, and religious activities.
Meaning, the company receives tax breaks. Although Sanitarium declined to comment, its website says: “Sanitarium’s primary purpose is the promotion of health food products. This is aligned with the ‘whole person health’ objectives of the Seventh-day Adventist Church.
“Sanitarium remains committed to its purpose of helping New Zealanders enjoy healthier, happier, and longer lives.”
Weet-Bix may be full of fibre, but the ultra-processed food company is also responsible for the likes of Up&Go, Marmite, Peanut Butter, Cluster Crisps, Skippy cornflakes, Ricies, and Honey Puffs.
A 2021 study found 59 per cent of New Zealand’s packaged food products were classified as “unhealthy” in 2018. At the time, 22 companies dominated the market. Among those were Arnott’s, Bluebird, Griffin’s, Heinz Wattie’s, Kellogg’s, Nestle, Sanitarium, Coca Cola, and the two supermarket home brands.
Charity amendments fall short
Should the Charities Amendment Bill 2023 have included clearer distinctions between charitable organisations and charitable businesses? Sanitarium’s income-tax paying competitors could argue, yes.
Hell, there’s also the question whether the “advancement of religion” should have been scrapped altogether, as New Zealand is a secular country.
A Tax Working Group (TWG) report flagged these issues in 2018, estimating 30 per cent of registered charities conducted business activities. The Seventh-day Adventist Church was listed in the top 10 charities with significant commercial assets.
In its final recommendations in 2019, the TWG said the underlying issue concerned how charities were using their profits for charitable activities. It recommended the Government should regularly review the sector’s use of what would otherwise be tax revenue.
Alas, the ship sailed in 2018, when the Labour Government sought an official Charities Act review, noting it wasn’t necessary to consider changing the definition of “charitable purpose”, such as the advancement of religion. The Department of Internal Affairs said out-of-scope considerations could be looked at later, maybe.
And so it was. This year’s legislation introduced changes that tinkered at the edges, including a non-legislative requirement for larger charities to report reasons for accumulating funds through annual return forms.
How the Grocery Commissioner handles the Weet-Bix saga is a wait-and-see. For the new charity financial return requirements, it’s a wait-and-see. Until then, it’s a case of attempting to close Pandora’s box, one Weet-Bix at a time.
