Look at retailers not producers

August 3, 2011

Federated Farmers and Fonterra are both pleased that the Commerce Commission has decided it has no basis for a price control inquiry into milk.

However, it’s not ruling out a further inquiry  into how Fonterra sets the price it pays farmers and what it charges other processors.

Sue Chetwin from Consumer is calling for a milk commissioner and  Labour and Green MPs want the Commerce select committee to launch another inquiry.

If they’re doing that, should look at the whole supply chain.

The Commerce Commission report said there was enough retail competition between  two major supermarket chains, dairies, service stations and other retailers.

I’m not so sure about that. Almost everything is more expensive at dairies, service stations and other small retailers. Those are the places you go for emergency supplies, not normal grocery shopping.

That leaves the supermarket duopoly.

It is difficult comparing prices here with those overseas because of the exchange rate and different taxes, but our observation at restaurants and supermarket during our recent trip to the USA and Canada was that food there seemed to be cheaper than it is here.

Some prices in a Walmart in Canada were: beef mince $9.50/kg; T bone $16.22; sirloin $11.10; stir fry $15.06; roast beef $12.06; bacon $10.44; pork tenderloin $10.96; pork chops $8.80.

I don’t have local comparison for these, but a  New Zealand boneless leg  lamb was selling for $14.92/kg  at Walmart, I saw it priced at $29.99/kg at a New World  here yesterday.

A frozen leg of New Zealand lamb was $13.62/kg.

It looked good but beside it were Walmart’s own brand of frozen loin chops selling for $20/kg. The bag was full of ice and had they been a tenth the price we might have contemplated buying them for dog meat.

Eggs were $2.98/dozen; skim milk cost $1.38/litre, full cream milk was $2.77/litre..

Cheddar cheese cost $13.43/kg which, taking the exchange rate into account, wouldn’t be much different form here.

The only thing that was far more expensive – and to our admittedly biased taste buds, not nearly as nice – was ice cream. A small cone cost $5.

Prices recorded at one supermarket and the gut reaction from purchases at other supermarkets and restaurants aren’t much to build a case on.

But our overwhelming impression was that food was cheaper and we wondered how much that had to do with greater competition between supermarkets there in contrast to the duopoly which operates here.

If there’s to be an investigation into food prices it needs to be a thorough one which includes retailers not just producers and processors.


Bad bag charge gets worse

October 24, 2009

North Island New Worlds dropped the 5 cent charge on plastic bags after customers voted with their feet and went to other supermarkets.

We were less bolshie in the south but obviously there were complaints from more than the small group of customers which Foodstuffs general manager said has now prompted the company to drop the charge in South Island New World’s too.

However, the charge will remain in Pak’N Save and Four Square supermarkets because they had not experienced the same negative feedback.

I’ve been using reusable bags most of the time for several years but the principle of being charged more than the plastic bags cost so the company could donate money to charity annoyed me.

Now it’s not just the principle that I”m tetchy about, it’s the fact that they’ve removed it from some supermarkets but not all of them.

Groceries at Four Square stores are usually more expensive than at other supermarkets because they tend to be the smaller neighbourhood or rural stores which don’t usually have competitors near by.

In town many of the people who use them are likely to be unable to get to bigger supermarkets easily, perhaps because they’re elderly or don’t have a car.

In the country the cost of going further to another supermarket would be greater than savings to be made from the lower prices.

If there’s one positive thing about the bag charge debacle, it’s that it shows the positive power of competition. Obviously New World supermarkets have competition and enough customers changed to competitors to force Foodstuffs to drop the bag charge there.

Having done that it looks self-serving to continue the charge in Four Square stores just because most of their customers can’t easily take their custom elsewhere.


Bagging customer service

October 20, 2009

Paper Plus has a new look  and a new focus on books.

The Oamaru store in one of the first in the country to get a makeover. It looks quite different but has retained the friendly, helpful customer service to which I’ve been accustomed.

I bought several books today and was given a reusable bag in which to carry them.

I went from there to the supermarket where I spent a similar sum of money and was charged an extra 15 cents for plastic bags.

Next time I’ll have to remember to take my Paper Plus bag to the supermarket.


Let’s all get bolshie about bags

September 4, 2009

First it was Wellington, now it’s Auckland, what about the rest of us?

Foodstuffs dropped the 5c charge on plastic bags in Wellington when supermarket shoppers there got bolshie about them (i.e. went to competitors who didn’t charge them). Now they’ve dropped the charge in Auckland too.

It’s time for the rest of us to bolshie too.

I’ve got nothing against reusable bags, I was using them most of the time.

It’s not the charge per se.

It is being charged more than it cost so the supermarket could then donate the surplus to their choice of environmental charges.

It is also being charged for a bag I reuse when the supermarket wraps things which don’t need it in packaging which gets dumped as soon as I get it home.

And now it’s that they’re not charging people in Auckland and Wellington but they are charging the rest of us.

If I had a convenient alternative I’d be taking my business elsewhere.

I’m not going to drive out of my way for my groceries but if I get any tetchier about it I might get the courage to follow the example of a friend who leaves any unnecessary packaging at the checkout.


%d bloggers like this: