Supermarkets warned: change fast or face regulation
Supermarkets are on notice with the government going further than expected in its response to the Commerce Commission’s supermarket study
Mōrena and welcome to The Bulletin for Tuesday, May 31, by Anna Rawhiti-Connell. Presented in partnership with Z Energy.
In today’s edition: National still ahead in latest poll; consensus not reached between China and Pacific; minister questions TVNZ board; but first, government promises action on supermarkets.
The government has put supermarkets on notice - change at pace or face regulation
Government drops the regulation hammer
“If supermarkets do not strike good faith wholesale deals with their competitors, our regulatory measures will make it happen for them.” So said the minister of commerce and consumer affairs David Clark yesterday. In announcing the government’s response to the Commerce Commission inquiry into supermarkets, Clark said the government was putting supermarkets on notice, and they needed to change "at pace". The government agreed with 12 out 14 recommendations from the Commerce Commission but has gone further by threatening regulation of the wholesale access regime and will install a “watchdog” to provide annual reviews instead of an audit every three years. Stuff has an explainer on the changes here.
Sword still dangling
Stuff’s Susan Edmunds has taken a look at how much difference these changes might make for shoppers. In short, they probably won’t provide quick relief. Consumer NZ chief executive Jon Duffy says the changes are good but that the most interesting aspect is the work MBIE is undertaking around requiring major grocery retailers to divest some of their stores. It’s essentially a sword of Damocles left to hang over the supermarket’s heads. Managing Director of Foodstuffs NZ, Chris Quin has responded by saying “Foodstuffs is embracing the challenges laid down in the final report and by the Government to improve competition to benefit consumers.”
The proof is in the egg pudding we can’t afford to make
The price of food has blown out into such an issue for people, Stuff has reporters running a food price “Amazing Race” over the next five days. It’s early days but they’ve uncovered price differences between supermarkets and regions that should have the good people of Waihi out protesting. Eggs that cost $5.85 at New World St Martins in Christchurch cost $8.69 at New World Waihi. The exact same brand of eggs! The same supermarket. The same commitment to price rollbacks. There may well be “plausible reasons” for this like transport costs, but the public isn’t in much of a mood to stomach them.
What’s riding on it for the government and the people who vote for them/buy food?
Obviously the government would like us to stop being outraged by the price of eggs. Politically, it needs to work as a salve to the blows it's taken on the cost of living. The $350 allowance announced in the budget will be wiped out for many via interest rate rises which banks began rolling out yesterday. In the here and now they’ll be hoping it pushes supermarkets to do more to drop prices but commentators say real change won’t happen without more competition. Lastly, it’s an invitation to competitors who might’ve found hurdles like land covenants (dealt with via the budget) and wholesale access insurmountable. That will apply to local companies like the Warehouse, who Robertson namechecked a couple of times at the post-cabinet announcement, and perhaps overseas players like Aldi or Tesco.
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1 News Kantar poll still has National ahead
In a poll released last night, National is holding steady on 39% while Labour has fallen by two to 35%. The last 1 News Kantar poll was conducted in March. The Green party is up one to 10% and the Act party is down one to 7%. Based on the poll National and Act would have 60 seats in parliament. Labour and the Greens would have 58 and Te Pāti Māori would have two. It currently seems extremely unlikely that Te Pāti Māori would join National and Act to give them a majority. If Te Pāti Māori joined Labour and the Greens, that block would have 60 seats. This would result in a hung parliament, with a new election needing to be called unless a minor party abstained from confidence and supply motions. The Herald’s Thomas Coughlan (paywalled) breaks down the likely scenarios. The poll was conducted between May 21-25 just after the budget and the climate plan was released.
No consensus on agreement between China and Pacific countries
China’s foreign minister Wang Yi is currently touring the Pacific region and was hoping to sign Pacific countries up to a sweeping regional security and cooperation deal. But consensus hasn’t been achieved after a meeting in Fiji between Wang and leaders from Samoa, Tonga, Kiribati, Papua New Guinea, Vanuatu, Solomon Islands, Niue and Vanuatu. Fiji's prime minister Frank Bainimarama told reporters the Pacific nations were prioritising consensus. "Geopolitical point-scoring means less than little to anyone whose community is slipping beneath the rising seas, whose job is being lost to the pandemic, or whose family is impacted by the rapid rise in the price of commodities" Bainimarama said. China's ambassador to Fiji, Qian Bo said participants had agreed to discuss the draft five-year plan "until we have reached an agreement".
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Minsiter asks questions about Kamahl Santamaria
Broadcasting minister Kris Faafoi has asked the TVNZ board to explain whether proper process was followed in the hiring of former Breakfast host Kamahl Santamaria. It’s been reported that some TVNZ staff were unhappy with the process. TVNZ isn’t answering questions about the situation saying it's an employment matter. Faafoi’s office says no further comment will be offered by the minister until the TVNZ board responds. The story of Santamaria’s resignation unfolded over the weekend beginning as a question about why he hadn’t been on screen for nine days. The following day his resignation was confirmed. Further reports have emerged of a complaint about inappropriate behaviour from at least one female colleague at TVNZ. Santamaria was given a formal warning at his previous place of employment, Al Jazeera.
Got some feedback about The Bulletin, or anything in the news? Get in touch with me at thebulletin@thespinoff.co.nz
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