“It refused to supply Weet-Bix to the retailer selling it cheapest – grocery challenger The Warehouse – citing supply shortages. Those claimed shortages don’t appear to be affecting supplies to the big supermarkets.”
The Warehouse chief executive Nick Grayston previously told BusinessDesk the retailer has been cut off from its supply of Sanitarium’s Weet-Bix, and it’s a sign of the supermarket duopoly getting what it wants.
The giant health food brand, which operates as a charity and is wholly owned by the Seventh-day Adventist Church, told The Warehouse several weeks ago it would stop supplying it with Weet-Bix – which it has been selling since 2021 – because of a shortage of the product.
Grayston said the move was “directly contrary” to the intent of the Government in terms of equitable access to groceries and Sanitarium should have dealt with the shortage by “rationing” Weet-Bix to its customers, which include supermarket giants such as Foodstuffs and Woolworths.
“We don’t think that it’s fair that they’ve chosen to deal with that by cutting us off completely, rather than rationing everyone,” Grayston told BusinessDesk.
Speaking today on Labour’s announcement, Grayston their situation with Sanitarium showed the big grocery players were “very comfortable with the status quo and in no hurry to change unless forced to”.
“Meanwhile Kiwi families are having to pay more for even the most basic items like Weet-Bix.
“We welcome the recognition that we need to go further to improve competition in New Zealand and we’re up for playing our part.
“Without fair and independent access to supply, it’s an uphill battle for anyone new trying to offer groceries at affordable prices for Kiwis. Without this, we won’t see grocery prices come down and that’s what New Zealanders really need.”
A spokeswoman for Countdown, with has a share of about 32 per cent of the New Zealand grocery market, said they had worked with the Commerce Commission and the Government to ensure they complied with any requirements and would continue to do so. The other major operator is Foodstuffs, which operates Pak n Save and New World supermarkets, and controls 53 per cent of the market.
The Commerce Commission, which covers the new Grocery Commisisoner, has requested information from Sanitarium to explain its actions.
A Labour Government inquiry into competition in the grocery business showed the two big companies that control the grocery industry in New Zealand were making excess profits of around $1 million a day.
Following the inquiry Labour established a Grocery Code of Conduct, appointed a commissioner, banned restrictive land agreements that locked new entrants out of locations for new supermarkets, made unit pricing mandatory and required major grocery retailers to open wholesale offerings.
Act Party leader David Seymour called Labour’s latest announcement “vague promises of corporate welfare”.
Seymour said his party would make it easier to build new supermarkets, logistics infrastructure and farm improvements by replacing the Resource Management Act.
The party would exempt foreign supermarket chains from countries within the OECD and repeal farming regulations to lower production costs of food.
