Delay On Merger Decision Fiddling While The Household Budget Burns

A further delay to the Commerce Commission’s decision on the proposed merger of Foodstuffs North and South Islands is fiddling while the Kiwi household budget burns, the Grocery Action Group (GAG) says.

“It’s obvious the proposed merger of Foodstuffs North and South Island would reduce competition and keep grocery prices high,” said Sue Chetwin, GAG’s chair.

“The Commerce Commission study in 2022 said we have a failed food and grocery market with no effective market competition, so why is there yet another delay until October 1 for the Commission to decide to reject it?  

“What is the point of market studies if they result in constant delays while Kiwi household budgets burn?

“Claims by Foodstuffs the merger will result in lower prices cannot possibly be true given their previous mergers have resulted in Kiwi consumers paying amongst the highest grocery prices in the world.

“The proposal means two national distribution centres will reduce to one, making it even harder for small, innovative suppliers to get their products on to supermarket shelves and drive competition.

“Local supplers will come under even more pressure, especially in smaller communities that face the highest food prices.  Foodstuffs stores operating in these monopoly areas will have access to the added power of nationwide procurement to fend off new competitors.  

“With one distribution centre, the merger will add substantially to transport costs that the supermarkets will simply pass on to consumers.  It will also have negative environmental impacts.

“The merger will further entrench the lack of product choice on supermarket shelves due to the duopolies’ promotion of their own homebrands.  We now fully expect less choice for consumers, not more”.

“The dearth of new and innovative products available to Kiwi consumers makes the claim we are a food producing nation ring hollow, and damages New Zealand’s reputation.

“The merger entrenches the incumbent’s position for our two supermarket chains, making it even harder for competitors to enter the market.

“The Commerce Commission uregently needs more tools to stop these kinds of mergers.

“GAG calls on the government to act now to ensure regulations serve the interests of consumers rather than supermarkets.”

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