Commerce Commission Grocery Sector Market Study Report Released & Government Response - Tuesday 8th March 2022

8 March 2022

Commerce Commission Grocery Sector Market Study Report Released & Government Response - Tuesday 8th March 2022

Commerce Commission Grocery Sector Market Study Report Released - Tuesday 8th March 2022


The Commerce Commission released its final report into the Grocery Sector today and held a media and stakeholders briefing that United Fresh attended.
 
The key finding of the report:

  • Competition in the retail grocery sector is not working well for consumers (this key finding is unchanged from the interim report)
     

Summary of Recommendations
 
Recommendations to improve conditions for entry and expansion
Recommendation 1: Improve the availability of sites for retail grocery stores under planning law 
Recommendation 2: Prohibit restrictive and exclusive covenants that inhibit retail grocery store development, and monitor land banking by the major grocery retailers 
Recommendation 3: Require the major grocery retailers to consider requests for wholesale supply in good faith, and meet associated disclosure obligations 
Recommendation 4: The next reviews of the Overseas Investment Act and Sale and Supply of Alcohol Act should consider whether they unduly impede entry or expansion by grocery retailers 
Recommendation 5: Monitor strategic conduct that affects the conditions of entry or expansion. 
 
Recommendations to improve competition for the acquisition of groceries 
Recommendation 6: Introduce a mandatory grocery code of conduct to govern relationships between the major grocery retailers and their suppliers 
Recommendation 7: Consider a statutory authorisation or exception for collective bargaining by grocery suppliers 
Recommendation 8: Amend the Fair Trading Act to strengthen the business-to-business unfair contract terms regime.
 
Recommendations to improve the ability of consumers to make informed decisions 
Recommendation 9: The major grocery retailers should ensure their pricing and promotional practices are simple and easy to understand 
Recommendation 10: Mandate the consistent display of unit pricing 
Recommendation 11: The major grocery retailers should ensure disclosure relating to 
loyalty programmes and data collection and use practices is clear and transparent 
Recommendation 12: The major grocery retailers should co-operate with price comparison services. 
 
Other recommendations:
Recommendation 13: Establish a grocery regulator and dispute resolution scheme 
Recommendation 14: Review the state of competition in the grocery sector three years after implementation of our recommendations, and collect information in the interim to support this review. 

Our United Fresh Technical Advisory Group will be reviewing the report in detail to further communicate implications for the fresh fruit and vegetable industry.
 
You will find the full report here.

 

Government Response to Market Study Findings

The Government released a statement this morning in response to the Commerce Commission’s market study findings.

Media release: Consumers to benefit from a more competitive retail grocery market

New Zealanders will soon benefit from a much more competitive grocery sector as a result of market study findings unveiled by the Commerce Commission today. 

“The report is clear: competition in the retail grocery sector is not working. Consumers could get better prices, range and quality if action is taken,” Commerce and Consumer Affairs Minister David Clark said. 

“We made a manifesto commitment in 2020 to address the rising cost of groceries and to make sure shoppers are paying a fair price at the checkout. It’s especially important as the economy recovers from the impact of COVID-19. 

For full media release click here.

Government updates will soon be posted here.