Supermarket competition watchdog to be established

A new supermarket watchdog is being appointed in the Government's latest efforts to crack down on the grocery sector duopoly.

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Commerce and Consumer Affairs Minister David Clark said the Grocery Commissioner would be established to "hold the sector to account and ramp up competition".

They will provide annual state-of-competition reviews.

"The Grocery Commissioner will be a referee of the sector, keeping the supermarket duopoly honest and blowing the whistle where it suspects there is a problem," Clark said.

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The role is expected to be established later this year.

He also released for consultation a mandatory code of conduct between major grocery retailers to "ensure suppliers get a fair deal".

"Historically, there has been an imbalance in the bargaining power major grocery retailers have over their suppliers.

“The Grocery Code of Conduct will address this by preventing the major retailers from using their power to push costs and risks onto those suppliers. It will ensure that this relationship is conducted fairly."

READ MORE: Supermarket sector competition 'not working well for consumers'

Managing director of Foodstuffs NZ Chris Quin said they "support the appointment of an independent grocery commissioner as part of the Commerce Commission and the introduction of a mandatory code of conduct between major grocery retailers and suppliers, and we have been engaging constructively with Government on the detail of this".

"These changes will make a difference in providing clarity, certainty, and fairness in the industry, and allow real issues to be addressed with a fact-based approach."

Woolworths NZ managing director Spencer Sonn said they also support the moves.

"Having good supplier partnerships is very important to us and our teams around the country, and we look forward to reviewing the draft code and submitting on this during the consultation process.

"A good grocery code will continue to have Kiwi consumers' interests at its heart, be effective, fit-for-purpose, and hold all retailers to the same standards. Our focus is always to provide the best value we can for our customers and we work hard every day to do this."

In May, it was announced supermarkets would be forced to allow rival retailers access to groceries at reasonable conditions.

They would be monitored annually to check there’s enough competition, as part of the Government’s plan to crackdown on the supermarket duopoly.

A Commerce Commission review of the industry found competition wasn't working well for consumers.