Small-town New Zealanders will benefit most from bold changes to New Zealand’s supermarket supply chain, says a South Island man who heads a convenience store chain.
Minister of Commerce and Consumer Affairs Dr David Clark announced yesterday the Government would soon force the two big players — Countdown and Foodstuffs — to open up their wholesale operations to competitors, which would even out the market and help keep prices low.
He previously called for the duopoly to open up trade following a Commerce Commission report which found supermarkets made more than $1 million in excess profits every day.
The new system would incentivise them to play fair, he said.
"If they don’t, the commission will be able to use powerful new tools to make them do so."
Night ’n Day general manager Matthew Lane said the changes would help create a healthy market and would greatly benefit those in rural areas in the present state of the market, as they had to either travel into a larger town to shop or buy from dairies and convenience stores, which could not get products s.
Those in small towns without a supermarket run by Countdown or Foodstuffs were most heavily disadvantaged by tat a fair rate.
It was hard to tell which items would be cheaper and by how much, but it was safe to say many basic household items would be offered at better prices.
It would also greatly benefit those in cities with fairer prices and more convenience.
Night ’n Day had been in conversations with suppliers following the initial calls for fairer trade, but the new firmer regulations would help create a sustainable market.
"I’m happy for the industry as a whole."
He had met the Government to express his concerns and it had been open-minded to feedback, but the biggest push had been the findings of the Commerce Commission, Mr Lane said.
Dr Clark said the new plan would give a leg-up to smaller retailers and new market entrants with the ability to source and sell a wider range of groceries at better prices.
In its report, the Commerce Commission recommended any wholesale regime be voluntary, but the Government was not confident it would deliver suitable results, he said.
"Ultimately if these interventions don’t deliver a fair deal, new regulations can be utilised to require the major retailers to provide wholesale supply at certain terms, including price and range."
