Clark pushes grocery industry Bill, shows health minister hospital site
THERE are plenty of moments in politics which seem like exercises in futility, and Monday morning served up another one. Bright and early at 9am, a immaculately turnedout Dunedin MP David Clark appeared before Parliament’s economic development, science and innovation select committee — chaired by his much more casually attired Labour colleague Jamie Strange — to discuss the Grocery Industry Competition Bill.
As the sponsoring minister, Dr Clark was first out of the gates as the committee heard evidence on the Bill, although both he and the committee well knew that by some time during Tuesday’s hearings, Dr Clark would no longer be the relevant member of the executive thanks to new Prime Minister Chris Hipkins’ looming reshuffle announcement.
For Dr Clark, this was one final chance to use his warrant as Minister of Commerce and Consumer Affairs to advance one of his major pieces of work from last year — reform of the grocery sector.
The Bill aims to make it easier for existing or new entrants into the grocery sector to buy wholesale goods — a market presently parcelled up by the two main supermarket operators.
It contains provisions for a supply code to address the power imbalance between the big fish and the minnows, creates a grocery commissioner role to ensure there is a fair competitive fight, and drafts a dispute resolution process for aggrieved parties to follow.
With no little relish, Dr Clark pointed out that the Bill as written has sharp teeth, and that should anticompetitive behaviour be proven fines could be as high as 10% of turnover — a figure which could conceivably reach into the billions.
Coincidentally, one of the potential beneficiaries of this work, Dunedinbased convenience store chain Night ’n Day, was submitting just a few minutes later.
Its chief executive Matthew Lane helms the thirdlargest grocery provider in New Zealand but, as he conceded to The Spinoff last year, he would not do a large shop at one of his firm’s own stores because of the prices they are forced to charge due to not having access to wholesale groceries.
Mr Lane’s rapidfire presentation backed up a succinct written submission which forcefully made the point that supermarketown brands, a source of products which potential competitors such as Night ’n Day cannot access, cost between 60 and 65% less than brandname products sold at the two main stores.
Smaller competitors, only able to access brandname products, have to place a margin on those already higher prices, making it harder to compete with supermarkets . . . and because they often cannot access the wholesale market operated by the main chains they end up stocking their shelves, ironically, by going to the local supermarket.
Mr Lane’s other main point was illustrated by a snapshot of Ardmore St in Wa¯naka.
On one side of the street sits a Four Square and a Night ’n Day, on the other is a Countdown Metro. All sell groceries, but only two have a liquor offlicence, which Mr Lane argues gives them an unfair advantage in attracting a customer wanting to do a onestop shop.
The options to improve competition, he argued, were either to remove offlicenses from supermarkets or allow a wider range of retailers to be able to sell groceries and hold a liquor licence.
Either of those moves comes associated with political risk and it will be interesting to see if the Government has the courage to adopt one or the other.
But back to Dr Clark, who did indeed have the shades pulled down on his time in Cabinet the following afternoon.
Noone — least of all himself — is going to forget the shambolic demise of Dr Clark’s first shot in a ministerial role, although he remains fiercely proud that the new Dunedin hospital project got under way on his watch as health minister.
Dr Clark did get that rarest thing in politics though, a second chance, and made a go of his varied portfolios.
As seen, he has delivered market studies into various retail sectors and has initiated what may be lasting change in the supermarket sector.
He has shepherded through New Zealand’s first digital strategy and — despite Michael Woodhouse’s misgivings — it seems that the 2023 Census is on track to occur as planned. He leaves plenty of work for his successors to be getting on with, but there is a decent foundation to be built upon.
Speaking of foundations, by Thursday Dr Clark was back in Dunedin, and back in civvies, escorting the newlyminted Health Minister Ayesha Verrall around the vacant lots and groundworks which one day, hopefully, will be Dunedin hospital.
This was Dr Verrall’s first outing in her new portfolio and an indication of just how seriously Labour is taking the disquiet in Otago and Southland at the move by Te Whatu Ora to scale back from the hospital’s detailed business case in a desperate attempt to rein in costs.
Dr Verrall, who trained as a doctor a block over from the hospital site, will be easier to persuade than her predecessors as minister that clinical need should trump financial necessity, but as a still relatively new minister she may also lack the clout or the nous to convince the Finance Minister to permit the project a second budget boost in a matter of months.
It may — or may not — help that said Finance Minister Grant Robertson was once, like Dr Verrall, president of the University of Otago Students’ Association and is well acquainted with the issues surrounding Dunedin Hospital.
What good Dr Verrall’s trip will bring remains to be seen but one thing Labour definitely does not want to see in one of its stronghold seats, in an election year lest we forget, is antiGovernment protest marches, as threatened by various Dunedin city councillors this week.
The visit is an important first step though, and should for now drop to a simmer the boiling anger that the South seems to be being shafted by changes to the scale and size of its much needed new hospital.