New laws come into force to boost competition and lower food prices

A new law to address the lack of competition and power imbalance in the grocery industry is one step closer to coming into force.

The food industry competition bill had its third and final reading on Wednesday night. The bill aims to increase competition and efficiency in the food sector through a series of new measures, including: Appoint a Food Commissioner to the Commerce Commission Supervise supermarket conduct and encourage competition.

A market study by the Commerce Commission two years ago found that the grocery industry was dominated by the duopoly of Foodstuffs and Woolworths, which operate Pac’n Save, New World and Countdown stores, and consumers were out of date. supermarket checkouts were found to routinely receive unfair deals. Because there is no significant competition.

Two supermarket operators were found to be making excess profits of more than $1 million per day.

Grocery prices rose 12.7% in MayMeanwhile, fruit and vegetable prices rose 18.4%, restaurant meals and convenience food prices rose 8.7%, and meat, poultry and fish prices rose 11.7%.

Last August, the government first fleshed out a plan to improve competition in supermarkets to ultimately push down food prices, allowing major supermarket companies such as Foodstaffs and Woolworths to offer wholesale products to competitors at trade shows. started working on a regulatory framework to price.

It also introduced the Commerce (Grocery Sector Regulations) Amendment Act, which came into force last June, to prevent supermarkets from restricting competitors from setting up stores on neighboring properties.

Duncan Webb, Minister for Commerce and Consumer Affairs, said the new Food Industry Competition Bill would create a more level playing field for small retailers and new entrants in the sector, offering a wider range of food products at better prices. He said he would be able to procure and sell them.

Webb said the government would implement the changes “quickly” once the bill is passed and announce a date for the Food Commissioner to take office.

He said the government has already implemented changes as soon as possible, such as mandating major grocery retailers to open wholesale operations so that other grocery retailers can have direct access to wholesale of a range of groceries at competitive prices. He said he was laying the groundwork for it.

It also addresses the power imbalance between retailers and suppliers, facilitates market entry and expansion of grocery retailers, and protects suppliers from the bargaining advantages of the current market duopoly. To do so, it also enacted a food supply code, which is now seeking feedback.

In addition to that, we have established a dispute resolution scheme and introduced pricing to help people understand what they are paying for.

“In the long term, consumers will benefit from having more choice in where to shop for groceries. By giving consumers choice, retailers can offer the best possible deals and We will bring new grocery services and products to market,” Webb said Wednesday.

“The cost of living is a core issue that we focus on. We have used the knowledge we gain from market research to create meaningful change for the benefit of New Zealanders,” he said. Told.

“Grocery competitors have entered the market, with two major chains announcing that they have set up wholesale business units.

“The increase in competition will take time. We are creating the conditions to ensure change.”