GOVT aims at supermarket duoply

Willis said RFI would help the government determine the next regulatory and legislative changes.

The government wanted to hear what would be needed to take a third player in the New Zealand supermarket market, she said.

Willis also announced that he was considering the “structural separation” of entities in the sector.

She said she was looking for advice from external experts “on ways in which the existing supermarket duopoly could be restructured to improve competition, including advice on demerger options for existing brands, the possible impacts of structural separation on existing entities and the concepts of how it could be achieved.”

Last month, Willis spoke at the New Zealand Economics Forum in Hamilton and explained the findings of a 2022 trade committee report showing that “competition among supermarket retailers is smooth, profits are high, and buyers pay higher prices than people in many other countries.”

Willis also noted that New Zealand supermarkets were the most expensive for cooking staples compared to the UK, Ireland and Australia.

In February, Willis ruled out the government opening its own supermarket chain and said the government could not force a third participant to the market to break the country’s supermarket duopoly.

In September last year, the Pierre Van Heerden grocery commissioner said the supermarket margins increased, the profits remained high and the two main operators, food and woolworths remained dominant.

“We want to see more competition and sustained pressure on major supermarkets to offer better results for consumers.”

He said that in a competitive margin of market retail growth would be limited or reduced, with price competition.