The Grocery Commissioner is due to release his debut report into the state of New Zealand’s supermarket sector – so what’s in store for the current duopoly?
A Commerce Commission report in 2022 concluded that supermarket competition wasn’t working well for New Zealand’s shoppers.
It found supermarkets were earning $1 million a day in excess profits.
The report included 14 recommendations for increasing competition in the sector and improving the price and range of groceries available to people.
One of those recommendations was appointing an industry watchdog to monitor supermarket competition every three years.
The government at the time went a step further and said competition would be monitored annually. The first of those yearly reports is due this morning.
Who is the supermarket watchdog?
Pierre van Heerden says he’s “excited and passionate” about his new role. (Source: 1News)
The previous government appointed Pierre van Heerden as the first Grocery Commissioner in July last year.
The Grocery Commissioner’s role is to “hold the [supermarket] sector to account and ramp up competition”.
This includes providing annual state-of-competition reviews.
Based within the Commerce Commission, the Grocery Commissioner is also expected to keep the supermarket industry honest in other ways.
For example, van Heerden launched a new “whistleblower” tool earlier this year, in the hopes people would feel more comfortable reporting any conduct that could be hampering competition.
The Grocery Commissioner also warned Foodstuffs North and South Island and Woolworths New Zealand last month over refund policies he said could be costing Kiwis “tens of millions of dollars” a year.
1News can reveal the Grocery Commissioner’s warning the major supermarkets to make changes – and face a mandatory reporting regime. (Source: 1News)
What will today’s report be about?
The Grocery Commissioner’s annual report is expected to take stock of competition within the supermarket sector.
Van Heerden sent an open letter to the grocery industry in April, saying his team had been collating detailed data and information from across the sector.
He said the first report would include analysis of key developments since the Commerce Commission’s market study in 2022.
The report will include the metrics it plans to monitor over the coming years, including market share, margin analysis and consumer outcomes.
Over time, the annual reports would show how competition was responding to regulations and whether further regulatory tools were needed, van Heerden said.
It remains to be seen if today’s report will also touch on the top three items on the supermarket “fix-it list” van Heerden released last October.
Those issues were:
- Pricing integrity – misleading or inaccurate pricing by retailers;
- Supplier behaviour – undesirable behaviour from some influential suppliers; and
- Level playing field – barriers to entry and expansion by alternative players
The Grocery Commissioner will deliver his report this morning.
