Former Consumer NZ CEO Sue Chetwin has revealed exclusively to the Herald plans to lead a group of consumer advocates and industry insiders that will lobby aggressively against the dominance of Woolworths and Foodstuffs over grocery retailing, Alex Spence reports.
A new consumer action group is taking aim at the two supermarket giants and promising to lobby aggressively for lower grocery prices, the Herald can reveal.
The group, which does not yet have a name, is being fronted by Sue Chetwin, a former newspaper editor-turned-consumer advocate who says it is time for a “consumer-led response” to the consolidation that has led to Foodstuffs and Woolworths dominating New Zealand’s $22 billion supermarket industry.
Writing exclusively in the Herald today, Chetwin said: “There’s a social emergency here that needs more decisive action than has been shown so far. The issue needs to be on the new Government’s ‘to-do’ list. We need solutions now.”
Chetwin declined to name the other members of the group, saying only that it involves other prominent figures who “understand the impact that our failed grocery distribution market has had on low and middle-income New Zealanders”.
She said the organisation is not affiliated with any political party or financially backed by a potential competitor to the supermarket companies. More details about the group will be made public later this month.
Chetwin said the group will use contacts in the media and politics to lobby the new National-led coalition Government to open up the market and hold new Grocery Commissioner Pierre van Heerden’s “feet to the fire”.
“He has to start using the powers he has to fine the duopolists when they breach the new mandatory code of conduct,” Chetwin wrote, referring to rules promoting competition and transparency in supply agreements that came into force in September.
It will also push the Government to expand the legal powers available to the Grocery Commissioner and Commerce Commission to regulate supermarkets; “furiously monitor” new pricing rules so that consumers are not confused about the cost of items; and expose “opaque” or “misleading” pricing practices.
Chetwin said she envisages the group working closely with other activist organisations, including Consumer NZ and Monopoly Watch. It will also work with supermarket suppliers to “encourage them to speak out about dubious and unfair practices which are bad for them and consumers”.
Chetwin was the chief executive of Consumer NZ for 12 years until 2020. Before that, she was a prominent media executive who edited several newspapers, including the Herald on Sunday.
Chetwin said she and other consumer advocates and industry observers decided that “enough was enough” after successive governments failed, in their view, to do enough to curtail Woolworths (Countdown) and Foodstuffs (Pak’nSave, New World and Four Square).
In 2022, a market study by the Commerce Commission found that competition “is not working well for consumers” in the retail grocery market, with little prospect that new competitors could emerge to challenge the duopoly.
In response, the Labour government introduced a new regulator, a code of conduct, pricing regulations and other measures to promote competition. Chetwin said these moves were encouraging but did not go far enough. “Prices have continued their inexorable rise.”
Potential competitors have been unable to make a dent in the market, she said, including the online grocery start-up Supie, which went under in October after only two years despite big ambitions, and the retailing behemoth The Warehouse.
A “final ignominy” came last month, Chetwin said, when Foodstuffs North and South Island businesses, which operate as separate co-operatives, applied for regulatory clearance to combine. That would, she argued, allow Foodstuffs to “tighten its control over pricing and supply, effectively reducing competition across the country”.
Woolworths said in a statement: “Without knowing the remit and membership of the new group, we can only make general comments on their requests to the Government.”
“We played a constructive role throughout the market study process and are already well under way with implementing the Commerce Commission’s recommendations, including taking steps to remove land covenants and creating a wholesale business ...
“We don’t take it for granted that three million New Zealanders each week choose to do their grocery shop with us, and we’re committed to continuing to offer them great value.”
Foodstuffs said its North Island and South Island businesses are “100 per cent New Zealand-owned major grocery retailers [which] work hard to buy well for our customers and keep investing back into every community”.
A spokeswoman added: “We understand the financial pressure that persistently high inflation and measures to tame it are putting on New Zealanders. We’ve been working hard to keep a lid on food inflation, despite record cost pressures from here and overseas.”
Foodstuffs added that regulation should be “fit for purpose” and reduce the cost of business and prices for consumers. “Any further regulatory action should be preceded by a robust cost-benefit analysis and assessment of existing regulation. New Zealand’s grocery industry is highly scrutinised and regulated, with an active and engaged community of advocates for suppliers and consumers.”
Foodstuffs said it would “work constructively with the new Grocery Commissioner as the extensive regulatory regime takes effect”.
Alex Spence is a senior journalist based in Auckland. Before joining the Herald, he spent 17 years in London, where he worked for the Times, Politico and BuzzFeed News. He can be reached at alex.spence@nzme.co.nz or by text or secure Signal messaging at 027 235 8834.
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