Pressure on wholesalers
The Government will have been pleased its announcement last week about a crackdown on the big supermarkets’ selfish wholesaling practices created a slight diversion from fallout from the Gaurav Sharma drama.
Not that the announcement was new. In late May, among a suite of measures proposed in the wake of the Commerce Commission investigation into competition in the grocery sector, Commerce and Consumer Affairs David Clark had signalled that if the big two retailers, Woolworths, and Foodstuffs, did not strike goodfaith wholesale deals with their competitors, regulations would make it happen.
His latest official release on this reiterated this threat, although it was short on detail. Subsequent media coverage suggests the duopoly will be given a year to reach ‘‘substantial’’ agreement with wholesale customers or be forced to do so with prices set by the new Grocery Commissioner.
Dr Clark has high hopes for the impact of the moves on wholesaling, recognising that if there is no proper access to wholesale goods there is no incentive for competitors to enter the market.
It will be good news for towns served only by smaller operators. They seem most likely to benefit from any price reductions arising from the freeingup of wholesale goods.
As it stands now, many smaller operators have had no choice but to buy their goods from supermarkets, like any other shopper, and then mark them up.
A large independent wholesaler on a par with the duopoly’s facilities would give the big two a run for their money, but that does not seem like a possibility at this point.
It remains to be seen whether there will be some tougher measures from the Government, beyond those it has already announced as we edge further towards the general election and cashstrapped shoppers become increasingly vocal about the high cost of living.
The Ministry of Business, Innovation and Employment has yet to report back on its work examining the costs and benefits of the contentious option of requiring the major retailers to divest some of their stores or retail banners.
And another thing . . .
In an odd quirk of fate, the furore around Labour’s expulsion of rogue MP Dr Sharma and the dispatching of divisive MP and Speaker Trevor Mallard (eventually to Ireland) meant that the pushing through of the deeply unpopular Oversight of Oranga Tamariki System and Children and Young People’s Commission Bill attracted less media attention than it deserved.
This legislation ideally should have commanded crossparty support, but only Labour backed it and used its clout to bulldoze it through.
There have been too many scandals over too many years involving Oranga Tamariki and its predecessors not to want a unified understanding on how to improve the situation.
Indeed, during the week the organisation was fronting up (and not particularly convincingly) to the Royal Commission into Abuse in Care over many and varied appalling shortcomings.
The Government may argue it has taken its time over this legislation, has consulted widely and altered some of the aspects about which there was concern, particularly the changes to the role of the Children’s Commissioner and the independence of the monitoring body.
But this has been mere tweaking which has done nothing to silence critics. Insisting on the monitoring body coming under the Educational Review Office rather than be established as a truly independent entity is a slap in the face to those who have suffered under state care and are deeply suspicious of anything remotely governmental.
Moves to get the Bill referred back to the select committee for further consideration failed, and nor was the Government prepared to wait for the outcome of the royal commission, due next June. The Government’s conviction it has got this right has been unwavering, in the face of considerable opposition within and outside Parliament. If it turns out to be wrong, what then?