Food and Grocery Council, Consumer NZ team up to combat supermarket duopoly

Source: 1News

Consumer NZ and the NZ Food and Grocery Council have announced an "unlikely alliance" to take on the supermarket industry.

Consumer NZ CEO Jon Duffy and NZFGC chief executive Katherine Rich appeared on Breakfast on Wednesday morning after publishing a joint open letter to parliament calling for changes to the industry currently dominated by Foodstuffs and Woolworths NZ.

Duffy said the average New Zealander's two biggest concerns were housing followed closely by groceries.

"The general consensus is that in terms of overall household income, what you should be spending on your grocery bill is between about five and 15 per cent of your average household income," Duffy said.

"In New Zealand, based on what we've been able to observe, it looks to be that New Zealander's are spending between 15 and 20 per cent of their average household income.

"So something isn't working here."

Rich said both parties believe one of the big factors behind that concerning figure is the lack of competition in New Zealand's supermarket landscape.

"New Zealand has a very rare market condition which is a duopoly," Rich said.

"It hasn't happened anywhere else in the world and that has meant weak competition and higher profits."

The two parties conceded they're not always allies but feel strongly about both consumers and suppliers being held to ransom by the duopoly of Foodstuffs and Woolworths NZ.

Consumer NZ and the Food and Grocery Council are therefore calling on the government to make numerous changes, including a mandatory code of conduct for supermarkets and increased wholesale access for more competitive prices.

"To be fair, there are some wonderful people who work in the grocery industry," Rich added.

"But there are too many reports of bullying, coercion, treating suppliers in a way is detrimental to consumers."