Government action to level the playing field for supermarkets has gone beyond the recommendations of the Commerce Commission, which has given renewed confidence to the Dunedin man who heads the Night 'n Day convenience store chain.
Minister of Commerce and Consumer Affairs Dr David Clark yesterday called for supermarkets to increase competition and be prepared for regulation, including opening up wholesale business at a fair price.
The Government largely followed the commission's recommendations, but went further when it came to the big two players — Foodstuffs and Woolworths NZ — opening up the wholesale side of operations to competitors.
The commission proposed a voluntary wholesale regime.
Dr Clark said this was not enough and said the Government would finalise a mandatory wholesale grocery access regime by the end of the year as a backstop, in case changes were not made voluntarily.
The announcement "very clearly" signalled wholesaling was expected to be on competitive terms, which would allow Night ’n Day and other businesses outside the two main players to compete in the sector.
"We’ve been held back for many years due to the terms we’ve been offered and the uncertainty of supply we’ve had."
Many of the commission’s recommendations in its report, such as making more land available for new grocery stores, were aside from the core issue.
The wholesale market had been protected too long, he said.
"It’s a very positive result for us."
The changes also inspired confidence new retailers were welcome in the market.
Over time a more competitive market would result in the consumer coming out on top, he said.
Dr Clark said the proposed voluntary wholesale regime was not sufficient and the Government was determined to have the backstop in place this year.
"If supermarkets do not strike good-faith wholesale deals with their competitors, our regulatory measures will make it happen ...
"We are not afraid to unlock the stockroom door to ensure a competitive market."
