ACT leader David Seymour has accused National of "shamelessly" joining a pile-on against Foodstuffs and Woolworths - calling break-up plans "insane" and "unethical" as he revealed his party's supermarkets policy.
Seymour said his plan to cut red tape hinged on a one-stop consenting shop for new supermarkets and on accepting food labels from several overseas regulators by default.
Under ACT's policy, a business wanting to open one or more supermarkets could get its consents, liquor licences and approvals through a single point "in months, not years". He said operators across towns also faced a different set of rules from every council.
"The biggest barrier to a third, fourth, or fifth supermarket chain in New Zealand isn't Foodstuffs or Woolworths. It's the government," he said.
"If you want lower prices, higher wages, and more choice, you don't do it by smashing the businesses that exist. You do it by making it radically easier for new ones to enter and challenge them."
If elected, the party would force Foodstuffs and Woolworths to break up their retail and wholesale supply operations. (Source: 1News)
Seymour said he was "so disappointed to see National shamelessly join the pile-on".
National announced earlier this month it would "pursue" splitting Foodstuffs so New World and Four Square became one chain and Pak'nSave another, if re-elected.
NZ First, Labour, the Greens, and Te Pāti Māori have also proposed interventionist approaches to supermarket competition in recent weeks.
"National's promise to break up Foodstuffs is just the latest entry in a long list. It has caught the most attention because that party traditionally holds itself out as a sober and sensible broker of economic policy," Seymour said.
"As one supporter of the party put to me last week, 'if they'll abandon their principles so easily on supermarkets, what principles can I trust them to hold?'"
If returned to govern, the party says it will divvy up grocery giant Foodstuffs – with Pak'nSave a separate entity. (Source: 1News)
'If you cut Roger Federer in half'
Seymour rejected the idea that Foodstuffs and Woolworths formed an uncompetitive duopoly, and said cheaper prices wouldn't come from intervention.
"And you might say 'so your answer is to help supermarkets?' Well… yes," he said.
"When you go shopping it’s not you versus the supermarket. Both sides want lower prices. They want lower prices than their competitor, you just want lower prices.
"If the government raises the cost of supermarkets doing business, that cost is passed on to you. If the government lowers the costs of doing business, you save money.
"Plus, lowering the costs of doing business is exactly how you get more competitors to the two big incumbents keeping them honest."
The party want to create a nationwide supermarket chain called KiwiMart, with 120 stores aimed at increasing competition and lowering grocery prices. (Source: 1News)
He said the two grocers had spent a century building networks that ran "through this country like arteries", and splitting them would mean duplicating functions.
"I think it's insane to think cutting a complex organisation in half makes two, more efficient organisations," Seymour said.
"If you cut Roger Federer in half, you don't get two better tennis players.
"These policies aren't just bad economics. They're unethical. They undermine the rule of law and property rights in this country, and they betray the basic idea of free enterprise."
'A regulatory moat'
Seymour said resource consent for one new supermarket took years, "before you've laid a single brick, hired a single check-out operator, or sold a single litre of milk".
"Hundreds of regulations. Dozens of regulators. All before you've sold a single tin of beans," he said.
"This is why we don't have more competition. Not because Foodstuffs and Woolworths are hoarding it. Because we've built a regulatory moat around them so wide that nobody sane wants to swim in it."
Grocery action group chairperson Sue Chetwin told Breakfast National’s supermarket separation proposal was largely good news. (Source: Breakfast)
Liquor licences could not be granted until a supermarket was built, Seymour said, which forced "a mad panic" of hearings in the week or two before a store opened.
He said ACT's new one-stop consenting shop for "new market entrants" would solve this.
ACT would also let food labelled for regulatory systems such as the UK, EU and US be sold without relabelling.
Seymour said importers now had to either run products packaged specifically for New Zealand, or open each box and stick new nutrition labels over every item.
"They can do an expensive run of product packaged specifically to our regulations, or they need to unload pallets, open each box, and stick nutrition labels over each product individually," he said,.
"That’s why the Dr Pepper you get at the dairy has a little white sticker over the nutrition panel. How absurdly costly and time-consuming is that, for a process that gives you all the same information formatted slightly differently.
He said this would "lower the barrier to entry for international supermarkets, who will no longer need to do expensive runs of products specifically for the tiny Australasian market to open stores."
TVNZ has extensive coverage of the election campaign. (Source: TVNZ)
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