Prime Minister Christopher Luxon speaks after Government supermarket announcement

• Prime Minister Christopher Luxon is due to speak live on Newstalk ZB after his Government announced potential changes to the supermarket sector.
• Finance Minister Nicola Willis is considering a “structural separation” to challenge the existing duopoly.
• Cabinet has agreed to a formal Request for Information to improve grocery sector competition.

Prime Minister Christopher Luxon says “intervention is needed” in the country’s supermarket sector and his Government is doing “everything it can”.

Luxon spoke live on the Mike Hosking Breakfast show on Newstalk ZB, saying the grocery market needed to be more competitive, more innovative and price goods at a lower rate.

Luxon also spoke about his Government’s Cook Strait ferry plans, saying Minister for Rail Winston Peters would “have more to say” on it later today.

Listen: Christopher Luxon speaks to Mike Hosking.

Luxon said this morning: “Where markets are failing or not working, intervention is needed.”

He said his Government was not setting a precedent it would intervene in any market where profits were deemed to be too high.

Luxon said he wanted to make sure market settings were as fair as possible.

“All we’re saying is this is a market that needs to be more competitive, needs to have more innovation in it, and Kiwis need to get better prices.”

Speaking on the ferries this morning, Luxon said: “We’re very comfortable with where we are at. We got to a really good position.

PM Christopher Luxon says: 'Where markets are failing or not working, intervention is needed.' Photo / Michael Craig

“We have a window of time, we don’t need the new ferries for a while, so there’s plenty of time in the process for him [Peters] to look at alternate options and really go deep and explore it further, so let’s see what he says later today.”

Luxon said yesterday: “Your supermarket shop is too expensive and now Kiwis pay some of the highest prices on the planet for food.

“This is totally unacceptable. Today we’re kicking off the next steps to bring in potential supermarket challengers - both in New Zealand and overseas - to compete with the duopoly,” the Prime Minister said.

Finance Minister Nicola Willis said she wanted to see a new player that could bring competitive pressure across the country.

Prime Minister Christopher Luxon appears on Newstalk ZB Mike Hosking Breakfast. Photo / Michael Craig

Willis said she was considering a possible “structural separation” of existing entities in the grocery sector.

The announcement was hailed as “terrifc news for Kiwi shoppers” by Grocery Action Group chairwoman Sue Chetwin.

“[What Willis] announced today will probably not throw up anything new, but it will allow for potential domestic and international operators to show their hand, and to outline the commercial and regulatory barriers that are stopping them from proceeding,” Chetwin said.

Veteran competition consultant and expert in grocery policy Ernie Newman said Willis’ announcement was more positive than some observers had anticipated.

“In particular, her commitment that the Government will consider possible structural separation and has commissioned expert advice on the form this might take, is a significant move.”

The Labour Party, however, said Willis’ announcement was “no more than paying lip service to all of the promises they’ve been making”.

“This long-awaited big announcement doesn’t bring competition into the supermarket sector, introduce a new player or bring down prices for New Zealanders as promised,” Labour commerce and consumer affairs spokeswoman Arena Williams said.

Willis said she had commissioned external advice on ways in which the existing supermarket duopoly could be restructured to improve conditions, including a de-merger of existing brands.

Economic Growth Minister Nicola Willis has commissioned external advice. Photo / Mark Mitchell

“I’m talking about potentially massive changes ... we have to get the detail right.

“I do not take this step lightly.”

Cabinet has agreed to begin a formal Request for Information to speed up the improvement of competition in the retail grocery sector.

“I am not prepared to sit down and wait for Aldi to turn up, that’s not good enough, so I’m rushing things along,” she said.

Seeking responses will be a quick, formalised process - six weeks, she said.

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