Government gets tick for supermarkets
Dairy owners are giving the government the thumbs up for giving the duopoly a regulatory kick and will tell the Select Committee on Thursday that more needs to be done.
“Our sector, convenience retail, is the third player and we welcome the Minister, Dr Clark, recognising that the Commerce Commission report was vanilla,” says Sunny Kaushal, Chair of the Dairy and Business Owners’ Group.
“This is a good start and we will be presenting to the Select Committee on the Commerce (Grocery Sector Covenants) Amendment Bill this Thursday, 2 June (11.45am) over what else can be done.
“One of our recommendations, a code of conduct, has been partially taken up by the Minister. Well done sir. We do hope this will boost supplier protection as they’re key to more choice for our sector and ultimately our customers.
“Research by Nielson in 2021 for Z Energy, shows that dairies, service stations and convenience stores had 17.34% market share of the entire grocery retail market. We are the third player so we will tell the Committee what we need to be more competitive.
“On Thursday we will tell the Committee that they must prohibit what looks like “letting fees” being charged on suppliers supplying the duopoly’s warehouses. These supplier fees are "an unjustifiable tax" and a means to gouge suppliers and consumers.
“That’s how come a number of businesses in the dairy sector shop at supermarkets because ‘specials’ can be cheaper.
“We will also recommend to the Committee and to the Minister, that a separate Inquiry be held on the stranglehold that the duopoly has over distribution.
“Lower prices start there and not where and how many stores Woolies or Foodies have. We’d suggest that MBIE and Ministerial time be better spent looking at the forced divestment of warehousing/distribution into at least three competing groups.
“That way, these distribution centres will compete for retail shelf space and suppliers and that is great news for suppliers, consumers and our sector’s ability to compete and to grow as the third player,” Mr Kaushal said.
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