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New Zealand's largest grocery supplier Foodstuffs says a government inquiry into food pricing competition would be a waste of time and money.
Commerce Minister Lianne Dalziel yesterday said the Australian Competition and Consumer Commission (ACCC) was looking at grocery price competition as households around the world grappled with
rising food costs.
The Government would await the ACCC report before considering whether a similar inquiry would be useful in New Zealand, she said.
Foodstuffs supplies supermarket chains New World and Pak 'n Save and Wellington managing director Tony McNeil said an inquiry would not reveal anything new.
"We've got an extremely competitive market over here, I think it would be a waste of time and a waste of money but we would certainly welcome any inquiry."
The firm's profit margins had not changed in the face of rising prices, he said.
"There's no difference to what we were doing 10 years ago, at the end of the day what's happened is that prices have gone up."
Mr McNeil said the cost of flour, cheese and oil was to blame, not supermarkets.
"When you have something like flour go up it flows on to chicken and to bread."
The company's fuel costs would increase by around $3.5 million this year, he said.
"Things have been pretty tough, the whole industry is under pressure, we're not getting growth," he said.
Yesterday in Parliament Green MP Sue Kedgley suggested a pricing code of conduct to ensure fair competition and reasonable prices between the two firms that dominate the New Zealand grocery market.
Mr McNeil rubbished both the code of conduct and the notion that there were just two major players in the grocery sector.
"It's just crazy to say there are only two retailers, there's not.
"The best thing for keeping prices down is making sure you've got good competition and you've got the consumers voting with their feet," he said.
Each Pak 'n Save store was run differently and set its own prices and New World supermarkets were also individually owned and operated, he said.
"It's the toughest I've seen it.
"All the price inflation that's happening at the moment makes it a hell of a lot tougher," he said.
Progressive Enterprises, bought by Woolworths two years ago and owner of the Foodtown, Countdown, Fresh Choice and Woolworths brands, said rising food costs were a global issue and not the result of retailer action.
Progressive spokeswoman Kate Carter said competition in the grocery sector was intense.
"We are competing in an extremely competitive market and that is of huge benefit to customers," she said.
"In addition to the fierce competition between supermarkets, the New Zealand grocery market has a strong component of other independent operators that sell the same goods...giving customers a wide number of options."
Ms Carter said supermarkets were low profit margin businesses, being further squeezed by the price of oil.
"This does not mean our margins have changed.
"In the past 12 months, we have seen many factors including global commodity prices, product availability, transportation costs, storage and operating overheads result in price rises on some products however we continue to absorb these as much as possible," she said.
- NZPA
