Market Study Of Supermarkets ‘positive’ For Shoppers, Manufacturers

The market study of supermarkets announced today by the Government will be positive for Kiwi shoppers and grocery manufacturers, says the New Zealand Food & Grocery Council.

Chief Executive Katherine Rich says: “This review is not before time.

“The Government says it wants to make sure consumers are getting a fair deal at the checkout, and that there are indications competition in the sector has weakened. It is a fair question for the Government to ask in a small market where there are two dominant teams that control over 95% of mainstream supermarkets.

“New Zealand has the most concentrated market in terms of supermarket ownership in the world and with that privileged market position comes additional responsibilities and accountabilities.

“It will be most valuable for the review to make transparent the effects this market power and the impact of the array of costs, rebates, deductions, claims, discounts, deletion threats, shelf auctions and supermarket margin expectations have on final prices to the consumer and the health of the New Zealand supplier community.

“The Food & Grocery Council will participate fully with the Commerce Commission’s study.”

Mrs Rich says she hopes the review will help pave the way for the establishment of a Grocery Code of Conduct in New Zealand.

“Suppliers have for too long had to put up with unfair and abusive behaviour by some stores.

“We need to shed light on some of the more questionable claims and demands being made of suppliers by some stores that, from time to time, overstep the line between robust negotiation and bullying.

“I have been speaking recently to leaders across the food and grocery sector, and to a person they agree a Code would be an excellent baseline for business dealings with supermarket customers.

“A Grocery Code of Conduct will never be a panacea, but those with experience in Australia and the United Kingdom report Codes there have made a huge difference, ruling out some egregious behaviours immediately and laying the foundation for better retailer/supplier relationships.

“I believe a Code here will ensure better treatment of all grocery suppliers to supermarkets – growers, manufacturers, marketers, and particularly merchandisers, who keep the shelves stocked.”

The Food & Grocery Council has also launched a petition asking Parliament to support a Grocery Code of Conduct. It’s on Parliament’s website here.

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