Supermarket competition report pushed back

The Government has confirmed it will be delaying the final report of the Commerce Commission’s investigation into supermarket competition, until March next year.

The market study, which was a campaign promise of Labour, is being conducted by the Commerce Commission. The draft report published in late July found there was not enough competition in the sector, and suggested a radical raft of potential changes, including the option of breaking up some players if required.

The final report, which was due in November 23 of this year, has now been pushed back to March 8, 2022 by the Government at the request of the Commerce Commission, after Covid19 delayed investigations.

‘‘The commission cannot complete its report by 23 November 2021. An extension is needed to provide for meaningful consultation with a broad range of stakeholders within the current environment,’’ Minister of Commerce and Consumer Affairs David Clark said. ‘‘This will ensure that the commission produces a robust final report with clear and workable recommendations.’’ It is understood that, as a result of the potentially radical nature of the first report, new stakeholders have also expressed an interest in submitting to the Commerce Commission.

The commission ‘‘got more fulsome and thoughtful feedback from stakeholders than they expected,’’ Clark said.

‘‘It is also vitally important that the commission completes the market study to a high quality. The draft report included draft findings, and mooted a wide range of options to address areas of concern. The final report is expected to provide more targeted recommendations.’’

The delay is partly practical, the Commerce Commission prefers to do face to face meetings and workshops with stakeholders, and Covid-19 has made that far more difficult. The two major supermarket chains – Woolworths New Zealand and Foodstuffs were also extremely busy during level 4 lockdown.

‘‘The consultation process on this draft report will refine and potentially change the final recommendations. It would be inappropriate for the Government to act before those affected by the draft report had the opportunity to respond,’’ Clark said.

The commission’s draft report found New Zealand consumers faced the sixth highest food prices in the Organisation for Economic Cooperation and Development in 2017, and that the big chains’ profits were ‘‘persistently high’’.

Among other options considered in the draft report were measures to bolster competition, and if that failed, breaking up one of the players.

It also found that wholesale purchasing practices of the big supermarkets was not working well for many suppliers and sometimes created ‘‘an imbalance of bargaining power’’.