Supermarkets ‘lie’ over competition

Countdown and Foodstuffs have been accused of ‘‘lying’’ over their desire for more competition by the founder of 2degrees.

Competition advocate Tex Edwards said Countdown owner Woolworths and Foodstuffs were lying over their desire for more competition, and only a break-up of the two supermarket groups would entice a third ‘‘like for like’’ challenger that could bring down grocery prices.

Countdown boss Spencer Sonn has meanwhile said multinationals are charging about 10% more than they charge Australian supermarkets for imported groceries, saying that helped explain why prices here were higher.

In a submission to Parliament’s Economic Development, Science and Innovation select committee, Edwards said there was ‘‘a level of fantasy’’ in the public policy debate about what would be required to address what he described as the supermarket monopoly problem. The select committee is currently considering the

Grocery Industry Competition Bill, which former prime minister Jacinda Ardern said in August would ‘‘unlock the stockroom doors’’ of Countdown and Foodstuffs’ Pak ‘n Save and New World supermarkets by forcing them to wholesale groceries on terms that could potentially be set by regulation.

But Edwards said in a submission by the Monopoly Watch lobby group that only ‘‘structural separation, and a forced retail divestment’’ of the existing chains would give a new competitor the distribution power they needed to ‘‘commence proper price and innovation competition’’.

Edwards founded telco 2degrees and has since restyled himself as a competition advocate in a range of industries, and in November was appointed by Building Minister Megan Woods to her 10-person Critical Materials Taskforce, established to trouble shoot shortages in the building materials industry.

Woolworths said in its submission to the select committee it ‘‘supported the policy intent of improving competition and efficiency in the grocery sector’’.

Edwards indicated it was veracity of that statement that he was calling out. ‘‘They should all be fired from the board if they want competition. The private sector wants monopolies. It is for the Government to create competition,’’ he said. A spokesperson for Woolworths NZ said it refuted Edwards’ accusation.

‘‘We have said throughout the entire market study and subsequent processes that we welcome competition into the sector and we stand by that,’’ she said.

The Government is currently considering whether to consult the public on whether it should require Countdown and Foodstuffs to sell some of their stores or chains.