GST Excuse For Cripplingly High Supermarket Prices Won’t Wash

If GST is a reason our food and groceries are amongst the highest in the world, as Foodstuffs North Island managing director Chris Quin thinks it is, he should also explain why our supermarkets are amongst the most profitable in the world, says Sue Chetwin, chair of the Grocery Action Group (GAG).

“GST offers no explanation for our supermarkets’ profitability so perhaps Mr Quin can,” Chetwin said.

“Perhaps he is trying to detract from the Grocery Commission’s recent annual report saying a comparison of the annual return on the supermarkets’ assets against a normal rate of return for supermarket retailing from 2019 to 2023 ‘shows the major grocery retailers continue to achieve higher levels of profitability than the Commission would expect in a competitive market.’

“The report goes on to say New World stores had the largest margin expansion between this period, with a 3.9% increase and the smallest increase was Pak’nSave with a 2.3% increase, both part of the Foodstuffs Group.

“In other words a lack of competition and high profits, not GST, is why Kiwis are suffering at the checkout,” she said.

“A recent study by Australian researchers compared prices in the UK, Ireland, Australia and New Zealand for a basket of around 40 commonly bought grocery products, including fruit and vegetables, milk, cheese, meat, bread, coffee and chocolate, showed New Zealand was the most expensive at between $379-$454. UK was the cheapest with groceries ranging from $314-$329.

“What is vital for New Zealand’s future as a food producing nation, and for our government, is an answer as to why Kiwis pay nearly the highest prices in the world for food and groceries which several market studies have now confirmed,” Chetwin said.

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