Government's Messaging On Supermarket Competition Is Inconsistent

The Consumers' Union of Aotearoa issued a challenge on 29 March 2020 against Kris Faafoi's ministerial press statement which instructed the Commerce Commission to relax its standards for supermarkets and telecommunications companies. You can read our earlier press statement and letter to the Minister (see here https://www.scoop.co.nz/stories/PO2003/S00304/govts-comcom-covid-19-directions-illegal-and-irrational.htm).

Since issuing its letter and press statement to the Minister, the Minister's office has responded identifying a parliamentary statement said to have been issued under section 28 of the Commerce Act 1986 and implied that it forms the legal basis underpinning the Minister's statement.

The statement identified (see here https://www.parliament.nz/en/pb/papers-presented/current-papers/document/PAP_96440/commerce-act-1986-government-policy-statement-on-essential) by the Minister's office was published on 30 March 2020, and so it comes nearly a week after the Minister's original statement, and following the letter sent by Consumers' Union of Aotearoa to the Minister.

Just like the Minister's statement, the notice itself contains no detail, nor any rational or legal justification for the Minister's earlier directions to the Commerce Commission to relax its functions.

The Consumers' Union of Aotearoa is pleased that its original statement and letter to Minister Faafoi has received attention in the press and in government, however we remain extremely concerned about the directions issued by Minister Faafoi, which remain unlawful and irrational.

We also note that the Prime Minister has given assurances that competition issues will continue to be examined carefully during the current COVID-19 crisis. We strongly welcome and support the Prime Minister's assurances concerning competition - this is not an opportunity for price gouging or unfair commercial practices - but we invite the Prime Minister to back up her statements with actions.

We are also extremely concerned about measures being implemented by the Government to close small grocery stores and shops, which can only further compound market dominance in New Zealand's two large supermarket businesses, and with little if any rationale. These measures punish competitors of supermarkets, concentrate market dominance in two large supermarket chains, and they reduce choice for consumers.

Cabinet collective responsibility dictates that the position of the Prime Minister, as agreed in Cabinet, mustn't be contradicted by Government Ministers outside of Cabinet. The free pass granted to supermarkets, telcos, and others, by Minister Faafoi's statement of 24 March 2020, contradicts the Prime Minister's assurances and should be revoked. As does the closure of small stores and businesses.

The Consumers' Union of Aotearoa is carefully examining other measures enacted and proposed by the Government, and will be commencing targeted legal proceedings in order to give a voice to millions of consumers who are being left with less choice by the Government's actions and omissions.

We would like businesses and consumers who are concerned about these issues to get in touch with us and follow us on Twitter.

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The Consumers’ Union of Aotearoa is an action group dedicated to improving the competitiveness of New Zealand’s market for the benefit of average consumers. If you want to get involved, write to us at consumersunionofaotearoa@gmail.com and follow us on Twitter at @of_aotearoa.
 

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