12 November 2009

Now is the right time for an inquiry into how the two giant supermarket chains set their prices, said Green Party Food spokesperson Sue Kedgley.

The Green Party has long been concerned by the stranglehold two supermarket chains have on the New Zealand grocery market. Progressive Enterprises and Foodstuffs between them control most of the grocery retail market in New Zealand.

“We need to investigate why food prices have risen more steeply in New Zealand than elsewhere and how it has come to pass that two supermarket chains control 95% of our grocery retail sector - one of the highest market concentrations in the world,” said Ms Kedgley.

“Without real competition New Zealanders need some sort of scrutiny or monitoring of the way the big two supermarket chains act towards both producers and consumers.

“Grocery prices have been increasing steadily while producers are being told to sell their produce for less and less.

“Why are wholesale fruit and vegetable prices down by 15%, according to Turners and Growers, but supermarket prices for fruit and vegetables down by only 6%?” Ms Kedgley asked.

"If prices are as competitive as supermarkets claim, they should be happy to be transparent about how they set prices.

“While our producers and growers are being squeezed ever more tightly by the virtual cartel of the big two supermarket chains, our consumers are being hit in the wallet by higher food prices.”

Ms Kedgley said New Zealand should look to Great Britain where a ‘code of practice’ has been instituted to curb the power of supermarket chains using stand-over tactics against producers and growers. This code of practice is soon to be replaced following a two year investigation by Britian’s Commerce Commission which concluded it needed strengthening.

“New Zealand needs to look at what has been happening around the world. Britain and Australia have both investigated the way major supermarket chains act in recent years,” said Ms Kedgley.

“Surely the public deserve some clarity around an issue that affects us all.”

ENDS

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