Supermarket report granted extension

The Commerce Commission has been granted an extension to finalise its report on competition in the supermarket sector.

David Clark. Photo: ODT
David Clark. Photo: ODT
Commerce and Consumer Affairs Minister David Clark announced the new deadline yesterday, and said Covid-19 had played a major part in the commission seeking, and his decision to grant, more time to complete the market study.

‘‘Lockdown meant some key players were not well placed to be able to finish their submissions,’’ Dr Clark said.

‘‘Also, some people made submissions who they hadn’t expected to — I think the draft report emboldened some people to speak up who hadn’t intended to — and so there has been more and more interesting submissions than the commission anticipated.

‘‘They also had a more challenging process to work through things virtually, whereas for the fuel study they met over four days with all parties working out how all scenarios would affect the market, and in a virtual environment that is more difficult to do.’’

The draft version of the report was released in July, and in it the commission found the current supermarket duopoly of Foodstuffs and Countdown worked against consumers and food producers, and stifled the emergence of potential competitors.

Options to reform the sector included possibly splitting up the existing chains to create new competitors, or separating wholesale from retail.

The commission had been asked to consider feedback from the organisations examined in the report and from other interested parties and then to deliver its final report by November 23.

Dr Clark said natural justice meant that parties, particularly the supermarket chains which had been focused on maintaining supplies of food and other essential products during Alert Level 4, should have more time to prepare their submissions.

‘‘Supermarkets had to concentrate on boosting their supply chains early in lockdown, and because of the number of locations of interests they were short-staffed, particularly in Auckland,’’ he said.

‘‘I was involved in a lot of that through my portfolios and saw the amount of senior engagement in those organisations to ensure that people’s basic needs were met, and they were tied up with that rather than responding to the Commerce Commission.’’

OECD research has suggested that food prices in New Zealand are the sixth most expensive, which Dunedin MP Dr Clark has previously said raised questions about whether consumers are getting a fair deal.

Yesterday he said although potential remedies for that could be many months away, there had been fewer complaints about food prices during this Alert Level 4 than in past lockdowns.

‘‘I think the sector is alert to its reputation at the moment due to the market study, so overall we are not seeing the same spike of concern that there was previously about any perception that they might have been taking advantage of the situation.

‘‘It is fair to give the participants in the sector the chance to correct any facts they don’t think are presented fairly or accurately, because there is a lot riding on this.’’

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