New law hoped to save Kiwis more at the checkout passes

Legislation which bans supermarkets from blocking land access to competitors in hopes of cheaper prices at the checkout for Kiwis has passed its final reading in Parliament tonight.

The law bans restrictive covenants on land and exclusive covenants on leases - as well as making existing covenants unenforceable.

The Commerce (Grocery Sector Covenants) Amendment Bill passed its third reading with unanimous support from the House this evening.

It's the first in a suit of measures targeting the supermarket duopoly after the Commerce Commission found competition in the retail grocery sector was not working.

Minister of Commerce and Consumer Affairs David Clark said it will put an end to anti-competitive land wars silently hampering the grocery sector.

"This law will stop the major supermarkets from dictating the terms of leases to block opposition retailers from getting a foothold in an area.

"This is great news for the would-be competitors of the established supermarkets - especially those who've found it difficult in the past to find suitable sites to set up new stores."

Past legislation in the Commerce Act 1986 allowed for supermarkets to dictate the terms of leases to block opposition retailers from obtaining land in the area to set up shop.

The Commerce (Grocery Sector Covenants) Amendment Bill amends the Commerce Act 1986.

Clark said: "We have officially put an end to the anti-competitive land wars which have been silently hampering competition in the grocery sector for years.

"This is great news for the would-be competitors of the established supermarkets – especially those who've found it difficult in the past to find suitable sites to set up new stores."

American giant Costco will end the current supermarket duopoly, bringing competition and giving consumers more choice.

Costco Auckland is due to open in August or September at its 14,000sq m warehouse at Westgate. Once open it will stock everything from apparel, appliances, homewares, and designer handbags to fresh meat and sporting goods.

Costco Auckland also features a fuel station.

German discount grocer Aldi has also been rumoured to be considering entering the New Zealand market, including Finance Minister Grant Robertson saying the company was interested. However, Aldi said it has "no current plans" to expand into the country.

Clark said the Government introduced the legislation under urgency on Budget night "because it directly tackles" one of the major issues with competition in the grocery market that acts as a barrier to fairer prices.

He also added it is not the last of the Government's initiatives to help Kiwis save on groceries.

"There is more to come to deliver greater competition. We continue to work at pace on a regulatory backstop to ensure there is a wholesale access regime in place to support competitors entering the market".

- Additional reporting RNZ