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Nau mai, haere mai.
Supermarket shopping is a pain point for many New Zealanders. And with just three companies controlling the majority of the grocery sector, there is an overwhelming feeling that maybe we are not getting the best deal.
So, many New Zealanders will have been pleased to hear the Commerce Commission blocked the merger between Foodstuffs North Island and Foodstuffs South Island. Had the merger gone through, Foodstuffs would have dominated the grocery sector with 55% of the market share.
But blocking the merger is not enough, according to authors Lisa Asher and Drew Franklin. New Zealand’s supermarkets generate the highest annual revenue per store among developed nations, raking in the equivalent of US$27.9m, versus $19.56m in the United States, $7.7m in Germany and $17.02m in Ireland.
As Asher argues, “The Commerce Commission’s decision on the proposed Foodstuffs merger reinforces concerns about competition in New Zealand’s supermarket sector, as does the report from the Grocery Commission and the earlier grocery sector study.
"If competition creates better prices for consumers, then splitting up New Zealand’s concentrated supermarket sector is the logical next step.”
Logical, maybe. But the question is, of course, whether there is the political will to do that. To be honest, I am not holding my breath.
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Debrin Foxcroft
Deputy New Zealand Editor
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Lisa M. Katerina Asher, University of Sydney; Drew Franklin, University of Auckland, Waipapa Taumata Rau
New Zealanders have less choice over their grocery shop than consumers in most developed countries. Breaking up the existing supermarket conglomerates would be a next logical step.
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Sanghyub John Lee, University of Auckland, Waipapa Taumata Rau; Ho Seok Ahn, University of Auckland, Waipapa Taumata Rau; Leo Paas, University of Auckland, Waipapa Taumata Rau
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Tom Baker, University of Auckland, Waipapa Taumata Rau; Alistair Sisson, Macquarie University
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