Editorial: Concern over grocery prices: David Clark orders supermarket stocktake

Does your shopping experience leave you wondering whether you have just been fleeced? Photo / Mary Altaffer, AP, File

Editorial

EDITORIAL

Consumer Affairs Minister David Clark this week announced a Commerce Commission study has been ordered on supermarkets.

Clark said Kiwis were "genuinely concerned" about the price of groceries and it was time to ensure our Australian-dominated FMCG sector was playing fair.

The investigation is similar to one on the petrol market last year, which led to a more transparent pricing strategy with fuel prices prominently displayed at forecourts.

There are two dominant supermarket chains in New Zealand: Australian-owned Woolworths NZ and Foodstuffs. Woolworths is the owner of Countdown while Foodstuffs owns New World, Pak'nSave and the smaller Four Square.

Clark said some of the big supermarket operators have said there is already a healthy degree of competition in the sector but "we want to test whether that is the case".

Being checked out is the structure of the grocery industry at the wholesale and retail levels; the nature of competition at the wholesale and retail levels of the grocery industry; the pricing practices of the major grocery retailers; as well as the price, quality, product range and service offerings for retail customers.

The New Zealand government has asked its Commerce Commission to investigate and study why grocery prices are high. Are they?
As per this data NZ seems fine, however we wouldn't want to be living in Switzerland or Sweden or Japan.#grocery #fmcg #cpg #supermarkets #prices pic.twitter.com/LeuBHQxQ7e

— FMCG Academy (@FMCG_Academy) November 18, 2020

As well as the experience of the consumer, the study will look at the way supermarkets procure goods - and this could be good news for growers and producers who have long grumbled about supermarkets setting prices at poorly, take-it-or-leave-it levels. Some transparency might finally unearth the truth.

Clark's stated objective of using the study to help "regulate" the sector won't have been missed by the big supermarket chains. Let's hope shoppers are in receipt of some good news at the checkout as a result.