Wholesale changes welcomed
GOVERNMENT action to level the playing field for supermarkets has gone beyond the recommendations of the Commerce Commission, which has given renewed confidence to the Dunedin man who heads the Night 'n Day convenience store chain.
Minister of Commerce and Consumer Affairs Dr David Clark yesterday called for supermarkets to increase competition and be prepared for regulation, including opening up wholesale business at a fair price.
The Government largely followed the commission's recommendations, but went further when it came to the big two players — Foodstuffs and Woolworths NZ — opening up the wholesale side of operations to competitors.
The commission proposed a voluntary wholesale regime.
Dr Clark said this was not enough and said the Government would finalise a mandatory wholesale grocery access regime by the end of the year as a backstop, in case changes were not made voluntarily.
Night ’n Day general manager Matthew Lane previously criticised the commission for not addressing the issue of access to wholesale seriously enough, but said yesterday’s announcement inspired a ‘‘massive amount of confidence’’ that tangible change was being made.
The announcement ‘‘very clearly’’ signalled wholesaling was expected to be on competitive terms, which would allow Night ’n Day and other businesses outside the two main players to compete in the sector.
‘‘We’ve been held back for many years due to the terms we’ve been offered and the uncertainty of supply we’ve had.’’
Many of the commission’s recommendations in its report, such as making more land available for new grocery stores, were aside from the core issue.
The wholesale market had been protected too long, he said.
‘‘It’s a very positive result for us.’’
The changes also inspired confidence new retailers were welcome in the market.
Over time a more competitive market would result in the consumer coming out on top, he said.
Dr Clark said the proposed voluntary wholesale regime was not sufficient and the Government was determined to have the backstop in place this year.
‘‘If supermarkets do not strike goodfaith wholesale deals with their competitors, our regulatory measures will make it happen . . .
‘‘We are not afraid to unlock the stockroom door to ensure a competitive market.’’
AUCKLAND: Major supermarket chain Woolworths, owners of Countdown, says it cannot offer large scale wholesale supply at present but is working on delivering what the Government wants.
Commerce and Consumer Affairs Minister Dr David Clark yesterday announced the Government’s response to the Commerce Commission’s findings on the supermarket sector.
The steps taken by the Government will include forcing supermarkets to open up their wholesale arms to wouldbe competitors if they have not already by the end of the year.
Woolworths NZ managing director Spencer Sonn said the chain supported the commission’s recommendations. While the Government planned to go further, ‘‘we accept that change is needed, and we’re committed to playing a positive role in a competitive grocery market for Kiwis. We don’t yet have the capability to offer large scale wholesale supply, however, we are already in the process of planning how we achieve this,’’ Mr Sonn said.
The second major supermarket chain, Foodstuffs, has also released a statement saying it would work with the Government to implement the changes.
Its two cooperatives, Foodstuffs North Island and Foodstuffs South Island, were already working with the Ministry of Innovation, Business and Employment on the mandatory code, managing director Chris Quin said.
‘‘We support the Government’s request that there be an active wholesale market in New Zealand, and the request for us to participate in that market . . . What is key now is understanding the demand landscape and ensuring that suppliers work with us and our wholesale customers to enable those customers to access wholesale groceries at competitive prices,’’ he said. — RNZ