Stopping Foodstuffs Merger Offers Glimpse Of Hope For Competition

Rejecting the proposed merger of Foodstuffs North Island with Foodstuffs South Island offers a glimpse of hope that consumers and suppliers will yet see more competition and lowering of food and grocery prices sometime in the future, says Sue Chetwin, chair of the Grocery Action Group (GAG).

“The Commerce Commission decision was the only reasonable one possible if we were to keep the slightest chance of getting more supermarket competition and the possibility of lower supermarket prices alive,” she said.

If the merger had been approved, the existing duopoly’s stranglehold on our food and grocery budgets would have been total and irreversible. Suppliers would also have seen their access to consumers reduced even further

“But though this ‘line in the sand’ decision is very welcome it won’t provide much relief for consumers anytime soon.

“We need at least another supermarket chain in place within a year to achieve this, and since there is no sign of that, we urge government to give the Commerce Commission more regulatory tools to limit the supermarkets’ otherwise unchecked access to our wallets. This includes the ability to force Woolworths and Foodstuffs to divest brands, for example splitting New world and Pak’nSave.

“At present market competition is clearly not working with our food and grocery prices amongst the highest in the world.

“We urge our Commerce Commission to continue with this courageous kind of decision-making that supports consumers and suppliers. But the Government needs to make good on the need to strengthen the Commission’s powers so it can be even more effective in bringing down the price of food.”

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