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The Night ’n Day foodstores network could push further into the groceries sector if a freer market was created, general manager Matthew Lane said.
Mr Lane was part of a panel that appeared before the Commerce Commission this week, as a probe continued into competition in the retail grocery sector.
The sector is dominated by Foodstuffs and Woolworths, which own or license supermarket chains such as Pak’nSave, New World, Countdown, Four Square and FreshChoice.
Night ’n Day is New Zealand’s third-largest groceries operator, after Foodstuffs and Woolworths.
However, wholesale channels were controlled by the two big players, Mr Lane said.
The commission is considering options such as requiring operational or structural separation between wholesalers and retailers, forcing the major operators to shed some shops and enabling creation of a standalone wholesaler.
‘‘There are pretty serious options on the table,’’ Mr Lane said.
Mr Lane called for retailers and wholesalers to have separate ownership.
‘‘There needs to be independent wholesale in New Zealand.’’
If a freer market was established, Night ’n Day could compete initially against chains such as SuperValue and potentially take on larger retailers in the longer term, Mr Lane said.
Foodstuffs South Island chief executive Steve Anderson said vertical integration helped retailers keep costs down for consumers.
The commission had overstated the co-operative’s profitability, he said.
‘‘The commission’s proposed changes to the wholesale grocery supply are untested and speculative,’’ Mr Anderson said.
‘‘It is also far from clear that, even if other retailers did access existing wholesale supply, that this would provide any meaningful benefit to consumers.’’
Mr Anderson said shoppers could benefit from simplified pricing, clarity about loyalty programmes, consistent unit pricing and making it easier for sites to become supermarkets.
A Countdown spokeswoman said the grocery market was already competitive and becoming more so.
‘‘Further, there are a number of changes discussed in the commission’s draft report that we also support, such as a mandatory grocery code and site availability.’’
Mr Lane said Night ’n Day had been part of a more competitive market in the past.
However, a supply agreement with Foodstuffs South Island was terminated soon after Night ’n Day bought 21 North Island Quickstop shops in 2011.
Night ’n Day shifted its focus to coffee and takeaway foods and now had 51 outlets.
Mr Lane said groceries had remained in its DNA and it was well placed to push further into that space again.
The commission is to publish its final report in March.