OPINION:
The Government is going after the supermarket duopoly, but with a worldwide food crisis on the horizon, relief may be a long time coming. By Jane Clifton
The understated politician sounds like an oxymoron, but as tributes to the recently deceased Stan Rodger remind us, there's a lot to be achieved under the radar.
Rodger, nicknamed 'Sideline Stan', was a steely, wily reformer in the Lange Labour Government, but his affability and old-fashioned reticence about showing off masked his efficacy, making him all the more effective.
The art of good stealth-bomber politicians is that even when they talk softly but carry a thumping great stick, everyone discounts the stick because "that's just good ol' Stan".
Few would have guessed the Beehive's current custodian of the lethal invisible stick is Commerce and Consumer Affairs Minister David Clark.
Clark has the irreducibly mild air of a knitting-pattern model, so now that he has emerged from the phone booth wearing Lycra and a cape, with a charter to zap, pow and blam the supermarket duopoly, he still looks as though he's only there to show off a nice bit of Fair Isle.
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Fortunately, his newfound superpowers will be more convincing in the form of legislation and regulation.
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Advertise with NZME.Clark has toughened up and furthered key Commerce Commission recommendations, including to make the supermarkets' code of conduct mandatory rather than voluntary, and ordering annual, rather than three-yearly, competition audits.
A fulltime industry watchdog will protect suppliers from being strong-armed into accepting retrospective discounts and other anti-competitive terms. It will have the power to examine transactions line by line, anytime it chooses.
Supermarkets will be forced to make their wholesale arm available to other grocers - from the corner dairy to potential new mass-market competitors.
Most tellingly, Clark already has officials working on ways to force a break-up of the existing ownership of supermarkets - so as to have a backstop ready if the sector fails to become competitive.
This would not, despite some histrionic commentary, entail asset seizures or forced sales, but would likely require existing franchise holders to reconstitute under different, competing new entities. Even this would be hugely complex and globally controversial, so it's just as well it's highly unlikely to be necessary.
Watch carefully
But neither is Clark bluffing. Ask any shopper: the public has withdrawn with extreme prejudice the social licence for the sector to keep operating as it has done. National MPs had better stow their 'we never interfere with the market' mantra and watch carefully, because a change of government will not reduce the public appetite for this reform.
Clark may be the only politician anywhere to derive some benefit from the economy-stomping pas de deux between inflation and global trade logistics. The Government might have been minded to wait and see whether the commission's softly-softly approach worked, but this year's onrush of living-cost shocks steeled its nerves.
Still in the dogbox in the public consciousness for breaking Covid restrictions while he was health minister, Clark had an incentive to prove his worth.
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Advertise with NZME.His low-pressure sales job on such sweeping reforms was prudent, since the new rules will take many months to enforce, let alone to show benefits to shoppers. Even so, the first beneficiaries will likely be grocery suppliers, many getting fair recompense for their products for the first time. This could be a considerable economic boost, as thousands of small and medium businesses become more viable.
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New Zealand will still likely suffer worse price pressure than other countries because its market distance so exacerbates transport delays and costs, which are already 700 per cent higher than pre-Covid.
For now, an old-fashioned cargo cult is developing - not least in the Beehive - for new competitors to arrive. A visitor from outer space might assume Costco, Aldi and Lidl were star members of the All Blacks, so hallowed are their names.
The Warehouse, meanwhile, has been stealthily growing its grocery capability, like a benign form of didymo, and has found a counter-intuitive glory moment in the inflation crisis. Its totemic first public salvo comes in the form of a $4 block of butter - compared with around $7 for the same product via the duopoly. It may well be taking a loss on this and its other staples, but its strategy is to create a new grocery habit among shoppers and build its capacity. Unlike other potential competitors, it already has suitable land and premises - site availability being the biggest deterrent to new competitors.
Food mirage
Still, it seems in poor taste to rejoice in bargain butter given the world's wider perils. When such an august technocrat as the governor of Britain's central bank uses the word "apocalypse" to describe the pending food-price crisis, it's time to pay attention.
The effective blockading of Russian and Ukrainian commodities - notably wheat and sunflower oil - are predicted to cause famine in Africa and intensify refugee pressure. Knocking out just a portion of these two global commodities is causing explosive inflation in these and other food categories. European leaders are already at panic stations, as it's nigh impossible to quickly reconfigure the world food-supply chain.
For New Zealand, a future period of flour rationing may be among the mildest of discomforts in store. Other food-producing countries are starting to consider making themselves more self-sufficient. This potential reversion to soft protectionism could make the trade road rockier for our food export-dependent economy.
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Those who glibly say that New Zealand is a food basket, so "we'll be all right, Jack", have missed a rather salient point. This country's wealth depends so heavily on exporting much of that food that any romantic notion of our food self-sufficiency is a mirage. Our food production efficiency depends on an imported input quotient, which is getting costlier by the day. Without a certain level of food-export receipts to fund imports, locally produced food will only get dearer still, and such new modern staples as cars, electronics and the new season's fashion will start to become prohibitive.
The future suddenly starts to look like a piece of curiously malicious random editing by the cosmos. New Zealand is already bracing for homes without Gib board and the quandary of cheese rolls with no actual rolls. The spookiest portent was the recent ram-raiding by youngsters of a shop selling outsized gentlemen's clothing. While police will be looking for suspects with BMIs over 30, it's time to consider that we all face an "opportunity" to lose quite a lot of weight.
