No, David Clark will not, but he will stake it on getting “a fairer deal for New Zealanders” at the check-out. But what does that mean and will we see cheaper cheese anytime soon, asks Anna Rawhiti-Connell in The Bulletin.
Grocery commissioner to be appointed
Announced yesterday by minister for commerce and consumer affairs David Clark, the grocery commissioner will be housed inside the Commerce Commission. They will have the power to issue warnings and issue fines which could be aligned to a percentage of supermarket turnover. The commissioner may not be in place until the first half of next year, with legislation being passed late this year. Hopefully it all moves faster and more effectively than the establishment and resourcing of the consumer advocacy council. As Newsroom’s Emma Hatton reports, the council was born out of the 2019 electricity price review but three years on, does not have any members or finalised terms of reference.
Consumer NZ CEO backs speed of moves but still believes there could be benefits to a break up of the duopoly
Clark made the announcement at the Commerce Commission and was joined by the CEO of Consumer NZ, Jon Duffy. As Bernard Hickey reports, Duffy seemed impressed at the speed at which the government was moving, saying, “This sends a clear message to the supermarkets: they cannot keep making super profits at the expense of struggling consumers” but he also acknowledged it was a step on a journey to fix a broken market. When asked about whether he’d like to see the duopoly broken up, Duffy stalled a bit saying “what I personally think isn’t necessarily…’ and then diverted into the need for further work on the issue, saying there could be unintended consequences but also real benefits to that approach.
What does a fairer deal actually mean?
On RNZ’s Checkpoint last night, Lisa Owen asked Clark if he’d stake his job on cheaper groceries for consumers. Clark said he’d stake his job on a fairer deal for New Zealanders at the check-out. That rightly prompts a question about how that might be quantified. One might assume it could relate to a reduction in the cost of groceries. When asked at the press conference about whether it was fair for New Zealanders to be paying $18.60 for a block of cheese (a price which I will hubristically assume was retrieved from The Spinoff’s cheese price index), Clark was reluctant to get into the details of pricing. When asked whether we would see lower prices, Clark said we were already seeing the impact of closer scrutiny on the supermarkets. As Stuff’s Tom Pullar-Strecker reports, Jon Duffy cautioned people not to expect “immediate changes in prices in the stores”.
Bullying behaviour back in UK and Australia despite code of conduct
Clark also announced the launch of a five-week consultation process for a mandatory code of conduct between major grocery retailers and suppliers, which he said was to ensure suppliers got a “fair deal”. A code of conduct has been in place in Australia since 2015. There’s also been one in the UK since 2010. The consensus seems to be that they were making a difference in curbing bullying behaviour by the major supermarket players towards suppliers. But this report from the Australian Financial Review points to a return to that behaviour amid the price pressure caused by inflation. In the UK, a recent YouGov survey from the Groceries Code Adjudicator (which I imagine is similar to what our grocery commissioner will be) has found relationships between suppliers and retailers have deteriorated. In Canada, where the Green party of Ontario is pitching a grocery code of conduct, a food economist has said a code of conduct is “not a silver bullet to food price inflation”.
Correction: This post has been amended as Jon Duffy was mistakenly referred to as the CEO of the Commerce Commission. He is in fact the CEO of Consumer NZ.