Nicola Willis to turn attention to supermarket sector after Budget

Finance Minister Nicola Willis will focus on the supermarket sector after this week's Budget. Photo / RNZ

By RNZ

Finance Minister Nicola Willis says she will turn her attention to the supermarket sector after this week’s Budget.

The Woolworths and Foodstuffs chains dominate New Zealand’s supermarket sector and the Government has said all options are on the table to introduce more competition.

Willis told RNZ on Tuesday the Government had received a number of submissions during the Request for Information period, hearing from investors and prospective competitors on possible barriers to entry.

“We’ve met with a number of major supermarket chains and smaller operators who have an interest in this area. We’re now putting together proposals off the back of all their recommendations about what the next steps will be to get a better deal for Kiwi shoppers.”

Willis was confident introducing more players would lead to better deals on products such as dairy, citing current prices seen at the US supermarket giant Costco.

Recent Stats NZ figures showed a sharp rise in dairy prices over the past year, with butter jumping 65%.

“What I know is that where you get a new competitor into a community, it often lowers prices not just there, but at the surrounding supermarkets too,” Willis said.

“If you look at something like Costco, you can get a kilogram of butter there for less than $10 at the moment ... whereas most New Zealanders are paying $10 for half that much butter.”

Willis said the Government would only consider breaking up the supermarket duopoly by force if it would deliver a better deal for shoppers.

Willis conceded she had to be convinced the $557 million boost to the film industry’s rebate scheme, announced last week, was worthwhile.

“I’ll admit that was something I was pretty reluctant to do, initially, because obviously that’s a lot of money. But then I looked at what the consequences would be if we didn’t keep up the rebate scheme that has been operating now across successive Governments.”

Willis said it became clear that if the scheme was dropped, international film productions would stop coming to New Zealand.

“Our film sector would die pretty quickly. You’d have thousands of people out of work.”

That would have flow-on effects for local economies and “stand in the way of growth”, she said.

– RNZ