Government launches review into prices New Zealanders are paying at supermarket

Anna Whyte
Source: 1News

The Government has launched a study into whether New Zealanders are paying a fair price at the supermarket checkout.

Commerce and Consumer Affairs Minister David Clark said it was "important to ensure that Kiwis are getting a fair deal at the checkout".

The investigation will be done by the Commerce Commission, and was a promise made by Labour during the election campaign. 

"Now we're cracking on with it," Clark said, adding the weekly grocery shop was a concern for many on fixed or modest incomes. 

"This study could make a real difference for Kiwis."

It would look into supermarkets and the rest of the grocery sector and the Commerce Commission is to report back by the end of next year. 

"New Zealand has one of the most concentrated retail grocery markets in the world and there are indicators that competition in the sector has weakened over time," he said. 

"We also know that the average Kiwi household spends roughly 17 percent of its weekly expenses on food, and this has been increasing year on year. It’s been a tough year for many Kiwis."

It would look into issues impacting competition. 

Clark said consumers could expect prices to come down "if the market study finds there's been anti-competitive practice and there's any kind of market power or price gouging taking place".

"Some of the big supermarket chains have said there is already a healthy degree of competition in the sector, and we want to test whether that is the case," Clark said. 

"If issues affecting competition are identified in the study into supermarkets, the Government will consider the necessary changes to bring about better outcomes for consumers."

The market study would be able to look into the structure of the grocery industry, competition, pricing practices and the price, quality, range available to customers.

Labour also promised to launch a market study into building supply prices in 2021. 

In Government last term, Jacinda Ardern launched a market study into fuel prices in December, 2018. 

year-long study  by the Commerce Commission found New Zealanders are paying too much for petrol. 

The  Fuel Industry Bill  to change wholesale fuel market arrangements came into force in September.