Unlikely alliance formed to combat supermarket power
It’s an unlikely pairing, but Consumer NZ and The NZ Food & Grocery Council have published a joint open letter to parliament today calling for a shake-up of the supermarket industry. “We are not always allies, but we both agree the concentration of market power in our supermarket sector is producing poor outcomes and putting strain on New Zealand households. Both consumers and suppliers are being held to ransom by the duopoly of Foodstuffs and Woolworths NZ,” Consumer NZ chief executive Jon Duffy said. Analysis of Stats NZ data show the cost of an average shop for a typical household equates to 15-20% of income for median or lower income earners. “The general consensus is that grocery expenditure should sit between 5-15% of total household income. What we’re hearing from many New Zealanders is that they’re having to spend too much of their weekly pay packet to keep themselves fed. Whatever way you slice it, the cost of groceries keeps going up and the duopoly’s profits are persistently high. Each year households are getting squeezed further,” Duffy said. Consumer NZ’s Sentiment Tracker found concerns about the cost of food and groceries have climbed in the past few months with grocery cost concerns ahead of those about fuel, healthcare, energy, insurance and phone bills. Concerns about food prices come in second to rent and mortgage costs. “Supermarkets are crucial to our communities and economy – but the duopoly are bullying suppliers, even large ones, and consumers are worse off in terms of price paid at the checkout, choice and innovation. With the lack of any real competition between the two supermarket chains, they’ve been able to maintain staggering profit margins which are not enjoyed anywhere else in the world,” New Zealand Food & Grocery Council chief executive Katherine Rich said. […]
