A Fast-Track To Stronger Grocery Competition

Wellington (Thursday, 29 May 2025) – The government has viewed stronger retail grocery competition as a national priority. But zoning, consenting, and overseas investment approval processes make new entry far too difficult.

The New Zealand Initiative today showed how to open New Zealand’s markets to more competition. It released drafting instructions for a Fast-track Supermarket Entry and Expansion Omnibus Bill, which would rapidly approve retail grocery developments at scale and cut through complex barriers that are preventing new supermarket chains from entering the New Zealand market.

The proposed Fast-Track pathway would:

• Streamline rezoning, consenting and investment clearance processes for a set of new stores and associated warehouses as a package, providing decisions within months;
• Override obstructive planning regulations;
• Open New Zealand’s grocery sector to the real possibility of a new competitor;
• Disappear when resource management reform has made the pathway irrelevant.

Proposal author Dr Benno Blaschke said, “New Zealand has a lot of fast-track regimes, but none of them can give a single, timely decision for complex projects across multiple councils. Our process achieves this and has been crafted for policy officials and legislative drafters to pick up and run with.”

Dr Blaschke explains, "Fixing the rules of the game allows the competitive process to unfold. If there are super-profits in grocery retail, opening the market lets new entrants compete for them while providing better service to consumers.”

The Initiative’s Chief Economist Dr Eric Crampton added, “The underlying problem has always been regulatory structures that make new entry practically impossible. Fixing that real problem makes far more sense than break-ups that risk increasing prices for consumers.”

The New Zealand Initiative is supported by businesses in its membership, including two supermarket chains. Our proposal would explicitly prevent existing major supermarket chains from using this fast-track process for at least five years, reserving the pathway for new entrants and smaller competitors before enabling existing chains to engage in more strenuous head-to-head competition.

Dr Benno Blaschke and Dr Eric Crampton explore this research note in the latest New Zealand Initiative podcast. Listen here.

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