There is a "small" pool of expertise for the $22 billion-a-year grocery sector watchdog job. Photo / Getty Images
There is a "small" pool of expertise for the $22 billion-a-year grocery sector watchdog job. Photo / Getty Images
Competition watchdog the Commerce Commission is getting about $4.8 million of Government funding to set up for its extra job as grocery sector regulator.
The funding is for 2022-2023 and to enable it to start work preparing for the new role and function, announced this week by Commerce and ConsumerAffairs Minister David Clark.
Decisions on ongoing funding from 2023-2024 will be sought later this year, a Ministry of Business, Innovation and Employment (MBIE) spokesperson told the Herald, after questions about how well the commission is resourced to deal with the additional role and the likely challenge of recruiting a grocery commissioner with the right skills and aptitude for this specialised role in a small pool of talent.
The commission's total budgeted funding for the 2021-2022 financial year was $84.4m, following a 42 per cent increase as it scaled up to deliver on its responsibilities policing the fuel, energy and telecommunications sectors, which are funded from levies.
Consumer NZ chief executive Jon Duffy, while welcoming the decision to appoint a permanent grocery commissioner to be a watchdog on sector prices and behaviour, said the resource challenges were "not a show-stopper" but navigating them demanded attention now.
"If they have to look overseas it's going to take a while.
"The Government's rationale in putting a regulator in the Commerce Commission is that it has specialist knowledge in this area, having just done a fairly significant market study.
"There is a small pool of experts capable of doing that work and you're talking about a team that does market studies, and there are ongoing market studies.
"Where does the priority lie? I'm not arguing the new regulator is vital, but do you have to adjust the existing market studies to do that?
Consumer NZ chief executive Jon Duffy. Photo / Supplied
"Do you go looking further afield - like in the MBIE market team that's working on this topic, or do you raid Treasury? Can you afford private consultants? The commission's done that before but it's not sustainable long-term."
Duffy said then there was the challenge of finding the right person to be grocery commissioner.
"They have to find the right person with the mana and the backbone to front up to this industry who are tough players, and who will not back down. [A person] who will be fair and reasonable and apply the rules they've been given but not afraid to take on those up to no good or being mischievous."
MBIE in a written response to Herald questions agreed finding the right background and experience for the grocery commissioner was important and "it is likely the pool of candidates with appropriate skills and experience will be small".
"However, MBIE is confident that a skilled and experienced grocery commissioner can be sourced from within New Zealand."
Asked how many grocery sector experts and dedicated market analysts MBIE employed, the ministry said it drew on expertise across its competition and consumer policy teams, along with specialists with grocery sector knowledge and competition law and policy.
It was also recruiting a market performance team to support responses to the grocery market study and future market studies. International expertise could be sought.
Commission chief executive Adrienne Meikle in a written response said the grocery sector was a $22 billion-a-year industry.
"We are conscious of the importance of supermarkets in all New Zealanders' lives and the significance of this work.
"Given the nature of this work and the potential impact, we will be making sure we find the right people and expertise and will be considering talent in New Zealand, internationally and from within our existing team."
Meikle said the Government's proposal for the commission to be the grocery regulator reflected its experience in economic regulation, competition, fair trading and consumer protection, as well as knowledge of the grocery sector through its recent market study, which led to the Government measures.
"What we are focused on right now in relation to the recent announcements is the establishment of this significant new function, including building on, and leveraging the structures and models we already have in place here ... this includes functions like telecommunications, which has been referenced by the minister, and Consumer NZ as operating well."
MBIE said it would develop the legislation to enable the commission to take on the regulator job and would work with the commission to confirm the detail of the commissioner's role and functions.
The ministry would continue to provide oversight of the commission, including its grocery regulator role. It would also lead work on advice for the minister to support decisions on ongoing funding for the commission for the role.
The legislation is expected to be passed later this year.
