Did the last government’s investigation into petrol prices achieve anything? Will this government’s investigation into supermarket prices achieve anything?:
Supermarkets will be subjected to a year-long “market study” by the Commerce Commission to see if they are offering consumers fair prices and their suppliers a fair deal.
Commerce and Consumer Affairs Minister David Clark announced the study into the $21 billion groceries industry would get under way this week, making good on a promise in Labour’s election manifesto.
New Zealand has only two big supermarket chain owners: Countdown, and Foodstuffs which owns the New World and Pak ’n Save brands.
“Groceries are one of our most regular expenses, so we want to make sure pricing is fair,” Clark said. . .
On the subject of fair, will the review look at the government’s in role in adding costs?
The Commerce Commission inquiry into supermarkets must look at the Government’s role in price increases, National’s Commerce and Consumer Affairs spokesperson Todd McClay says.
“During the lockdown the Government refused to allow local butchers or fruit and vege shops to open, effectively handing a duopoly to large supermarket chains.
Worse they didn’t learn from the mistake they made during the national lockdown and allow these businesses to operate safely during the Auckland lockdown.
“Through its term the Government has continued to add more costs onto businesses through fuel tax increases and sharp increases to the minimum wage. It has now said it will hike costs on businesses by doubling sick leave, imposing 1970s-style employment laws and adding another public holiday at a cost to Kiwi businesses of $2.8b per year.
“These cost increases added by the Government will inevitably mean fewer jobs and higher prices for consumers.
“About $2.8 billion of extra costs are about to be served onto businesses and this will flow through to higher prices to consumers.
These costs imposed by the government will put upward pressure on the price of goods and services at every link in the food chain.
“We support consumers paying a fair price for their groceries, and the Government has a role to play in this.
“Rather than waiting a year for the inquiry, the Government can do something to help consumers and every single business in New Zealand now by finding ways to reduce costs on them, not piling more on.
“Lowering costs to businesses will lead to greater affordability for consumers, that’s where the Government’s focus should be.”
The review probably won’t look at the anti-competitive behaviour enabled by the RMA, and the planning and building regulations which add delays and costs to new businesses setting up and existing ones expanding.
Then there’s GST. Our system is simple, and it should not be made more complex by making food exempt, but the tax does add 15% to every grocery bill.
However, there is one area over which the government has direct control which ought to change but it is one the review is unlikely to look at – the hardline environmental policies that add costs and reduce production.
If all the factors over which the government has control are going to be overlooked or ignored, regardless of what the review finds, just like the petrol price investigation, it will achieve nothing that makes a difference to prices.