In 2022, anti-trust watchdog the Commerce Commission found that the two big supermarket chains in New Zealand were earning NZ$1 million (US$570,000) a day in excess profits because of a lack of competition.
WELLINGTON: New Zealand will canvass a range of options to break a duopoly in its grocery market, including reducing barriers to a new international entrant and forcing the separation of the existing supermarket chains.
The government will now "actively seek a third player” and consider how to facilitate their investment in New Zealand, Finance Minister Nicola Willis told a news conference Sunday (March 30) in Wellington. If one does not emerge, then "we have to do something structurally, because the current market is not providing enough competition,” she said.
Foodstuffs New Zealand and the local unit of Australia’s Woolworths Group Ltd. form a dominant supermarket duopoly, which has been blamed for the relatively high prices New Zealanders pay for their groceries. In 2022, anti-trust watchdog the Commerce Commission found that the two big players were earning NZ$1 million (US$570,000) a day in excess profits because of a lack of competition.
Willis said last month she wanted to see another competitor enter the market to disrupt the major players and drive down prices, and that international supermarket chains and local investors had expressed interest.
"I am prepared to recommend significant changes to fix it,” Willis said, adding she would want to introduce any legislation required this year and have it pass before the next election in 2026. - Bloomberg
