Merepeka Raukawa-Tait: Government should intervene for a fairer deal at the checkout

The spotlight is now on the supermarket chains. Photo / Getty Images

OPINION

I value the work done by the Commerce Commission.

As an independent Crown entity, it is responsible for enforcing laws relating to competition and fair trading.

Where there is little or no competition it regulates those markets: telecommunications, electricity lines, fuel, gas pipelines, airports and dairy. These are all major industries critical to the success of the New Zealand economy.

I see their job as essentially looking to ensure consumers are being treated fairly when we pay for products and services.

Eighteen months ago the Commerce Commission looked into the supply of retail petrol and diesel used in land transport in New Zealand. Its report recommended actions for the Government to consider.

It moved quickly and introduced the Fuel Industry Act 2020, which promotes competition that benefits consumers.

Now the spotlight is on the supermarket chains.

Last week the Commerce Commission released a draft preliminary report into competition in the retail grocery sector. It found that competition is not working well for consumers.

My first thought was, what competition?

There are only two major supermarket chains in New Zealand: Woolworths NZ and Foodstuffs. As a duopoly of two major companies, I don't believe any smaller ones can compete. It's a situation that I believe successive governments over the past 20 years have been prepared to turn a blind eye to.

Since the report was released last week, commentators and consumer groups have been quick to comment and give the report a big thumbs up.

The New Zealand Food and Grocery Council (NZFGC) called the report "a meticulous and accurate reflection of the grocery market".

"The report shows there are big problems in the market, and consumers would get better prices, wider ranges and better quality if there was increased competition," NZFGC chief executive Katherine Rich said.

Even before the last election, the Government had concerns over supermarkets and asked the Commerce Commission to scrutinise the two supermarket chains to look into competition practices, price, quality, and range of grocery products available.

The report contains a number of recommendations for Government to consider. It is subject to consultation and I believe the duopoly will be preparing to mount a convincing response. I'm sure the government will come under heavy lobbying; I hope it will resist the temptation to be won over.

If it can introduce legislation, such as the Fuel Industry Act last year, then I don't think it should shy from intervention in this market too.

At a time when thousands of New Zealanders are trying to cope with the high cost of living and provide for their families as best they can, they are being hurt where it hurts most, their pocket.

I think shoppers have long suspected they were not getting a fair deal with grocery items unreasonably overpriced. When you must rigorously shop to a budget, you know exactly what items cost more this week than last week.

Where is the justification?

No one should object to businesses making a profit. But keep it fair. During the Covid lockdown last year smaller businesses had to close their doors. They were the local shops where we buy from owners we know.

The butcher, greengrocer, baker for fresh bread and pies and off licence. They were ruled out during lockdown. Sadly some have not been able to reopen.

The report clearly shows that competition is lacking and there is work to be done on consumers' behalf. I have no objection to intervention and enforcement if it leads to cheaper groceries and a fairer deal at the checkout.

- Merepeka Raukawa-Tait is chairwoman of the Whanau Ora Commissioning Agency, a Lakes District Health Board member and Rotorua District councillor.