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It all started with a bottle of milk in a Berlin supermarket.
Port Chalmers resident Bill Southworth was visiting the German capital in 2018 and was amazed at how much cheaper the food was compared with New Zealand.
That set off a chain of events that led to the Commerce Commission releasing its long-awaited draft study into the retail grocery market yesterday morning.
The study found that the market was dominated by the Foodstuffs and Woolworths NZ duopoly which meant that customers were the ones losing out through lack of competition.
In 2017, New Zealand had the sixth most expensive grocery market out of 38 OECD countries.
The high prices were no surprise to Mr Southworth after his European trip.
"I grabbed the [German] supermarket flyer with all the products and prices in it and translated it back into New Zealand dollars ... In every instance our prices were higher."
As chairman of the West Harbour branch of the Labour Party, Mr Southworth discussed the issue with his fellow members.
They put a remit for an investigation into the supermarket duopoly to the regional Labour conference, which then went to the national conference where it was passed unanimously.
This put the issue on the Government’s radar, and shortly after the election, local MP and Commerce and Consumer Affairs Minister David Clark announced the market study into supermarkets to determine "whether the sector is as competitive as it could be".
The preliminary findings indicate it is not.
Commission chairwoman Anna Rawlings said the big two retailers appeared to avoid competing strongly with each other, while potential new competitors faced challenges such as competitively priced wholesale supply and lack of sites for large-scale stores.
“Without intervention, we currently see little prospect of a new or expanding rival being able to constrain the major retailers effectively, and improve competition in the sector.”
The report also showed suppliers were hurt by the lack of competition.
Retailers would use fears of delisting products to push suppliers to accept disadvantageous terms.
The report suggested introducing a mandatory industry code of conduct, and allowing collective bargaining on behalf of suppliers, as potential ways to improve the situation.
Consumers faced issues as well, with complex pricing strategies often bamboozling grocery shoppers.
Measures such as mandatory unit pricing, and simplified pricing and promotional practices, were recommended.
Woolworths New Zealand managing director Spencer Sonn said that on face value some of the recommendations would have "significant implications" for the business.
"We will now take the time to read it so we can provide our feedback within the required timeframe."
Mr Sonn said his company worked hard with suppliers to distribute food and groceries.
Mr Southworth said he was delighted at the contents of the draft report and said it showed democracy worked at a local level.
"We dropped a pebble in the pool, and it ended up in a tidal wave at the end of it."
The draft report is now open for public consultation and will be submissions accepted until August 26. — Additional reporting The New Zealand Herald