That may have changed, as the Commerce Commission yesterday issued a warning to Woolworths New Zealand for a potential breach of the Grocery Industry Competition Act.
While there is no proof any such breach actually happened — that would require a court hearing — the fact the Commission was investigating and identified a possible problem, and that Woolworths moved swiftly to address it, suggests a genuine issue was immediately addressed.
The Commission, which has several times delved into the murky issue of supermarket competition, has long had the subject of ‘‘delisting’’on its radar.
Every supermarket, as it should, has the right to stock whatever products it likes. Factors such as cost, consumer demand and diversity of range all play a factor in those decisions.
However, many suppliers have had grave concerns for years about the power imbalance between small producers and the big supermarkets.
Between them, Woolworths and Foodstuffs control 82% of New Zealand’s grocery market. If a supplier is able to get their product on both company’s shelves, all well and good.
But only being stocked by one of the big two — unless backed by an exclusivity agreement — can lead to a potentially problematic lack of access to hungry shoppers.
Suppliers have alleged many reasons why access to shelves may have been denied to them, of a far more serious nature than simply quality or commercial concerns. Those concerns have only heightened with the advent of supermarket own brand products.
Some lack faith supermarkets are making fair decisions on what to stock, or not; others have claimed market share means they have no legs to stand on when it comes to a fair negotiation.
A tool developed to address these worries is the Grocery Supply Code, introduced in 2023. A mandatory set of rules governing how supermarkets deal with suppliers in good faith, it was hoped it would lead to greater transparency and certainty.
The code is now under review to make sure it is operating as intended: changes proposed by the Commission include curbing retailers’ ability to charge suppliers, requiring retailers to keep records of code compliance and prohibiting retaliation against suppliers that exercise their rights under the code.
Yesterday’s advisory from the Commission traversed much of that territory, its action being inspired by a review of how the major supermarkets operate what is called delisting — the removal of products from shelves.
The first iteration of the code gave suppliers a clear right to challenge delisting decisions. Although the Commission’s media release does not elaborate on whether this has happened or not, it did say it had ‘‘identified and investigated’’ instances where Woolworths New Zealand might have been at risk of a breach of the code.
As noted, Woolworths has done the right thing and acted on the Commission’s warning.
Although light on specifics, a warning has weight. Suppliers can have confidence the Commission is tackling this, and supermarkets now have few excuses for not playing the game by the rules.
Of course, genuine widespread competition in the supermarket sector would be the biggest safeguard against potential unfair trading by supermarkets. That is likely to still be years away, but at least some of the big issues are being addressed in the interim.
November 7
We now know that the next general election will be on November 7, Prime Minister Christopher Luxon following recent convention and announcing polling day early in the year. Now all parties know exactly how long they have to formulate and cost policies.
The date, one of the latest ones Mr Luxon could have chosen, does come with some potential issues. For Parliament to resume before the end of the year will require either a clear and obvious result, or for negotiations over governing agreements to be conducted much more swiftly than has been the case in the past.
It also casts some doubt over Parliament’s scheduled second scrutiny week: as the sitting programme lies it could clash with the resumption of the House.
But, we have a date. Now let the campaign commence.
