How do we cut our grocery prices?

“This is a once in a generation opportunity that we have to make a difference for Kiwi consumers. It’s a longterm sustainable difference that I’m interested in.”

Pierre van Heerden, Grocery commissioner

Pierre van Heerden has been in the role of grocery commissioner for just over 100 days, but he knows first-hand what needs to be done to foster competition in New Zealand’s $25 billion supermarket sector, he says.

The past three months have seen the former chief executive of coffee business Mojo and chair of the Food & Grocery Council talk to countless chief executives of supermarkets, “influential” suppliers, consumer groups and people dedicated to setting up potential new supermarkets.

He said he had been studying the Grocery Industry Competition Act religiously, and was not afraid to pull out the big penalty levers if suppliers and supermarkets

did not play ball to help bring down grocery prices and encourage competition.

South African-born van Heerden was working with a dedicated team of almost 25 people, based out of the Commerce Commission in Wellington said he was focused on understanding what was happening in the grocery industry and looking at how he can use his own experience in the industry, including as a supplier, along with the Act to enforce meaningful change.

The cost of living crisis is top of mind for most New Zealanders and he knew there was s a lot of expectation that he should bring about change fast, but ir needed to be sustainable, he said.

“This is a once in a generation opportunity that we have to make a difference for Kiwi consumers. It’s a long-term sustainable difference that I’m interested in.”

Van Heerden said he was committed to stamping out misleading or inaccurate pricing by retailers, undesirable behaviour encouraging anticompetitive behaviour by some influential suppliers, and levelling the playing field by removing the barriers to entry and expansion by new and emerging players.

“The one thing I want to make sure of is we keep focused on the long-term goal, and that is to level the playing field, get more choice, better pricing and better innovation in the market, because those are the things that are going to make a difference.”

The duopoly – made up of Foodstuffs and Woolworths – needed to “compete more effectively”, he said. Together, they hold a 97% share of the market.

There were several up-and-coming entrants into the market, including one supermarket eyeing up an initial 30 stores up and down the country, led by iwi Waikato-Tainui. The group has held discussions with British supermarket giant Iceland Foods, with a view to becoming a key supplier to the venture.

At least two other groups were working on similar plans for supermarket chains, Van Heerden said.

“We’re looking at how we help those new entrants to make sure that the wholesale regime, which is focused more on the smaller operators coming into the market, works effectively.”

SUPPLIED