Māori-backed third supermarket group would 'benefit Pākehā too'

Friday, 7 January 2022

An industry source believes the Commerce Commission could recommend the forced divestment of the Four Square and Fresh Choice chains; Nga Ngaru Rautahi o Aotearoa says that should be an option.

Māori involvement in a third supermarket group would benefit all New Zealanders by ensuring a break-up of the current duopoly did lower food prices, says Matthew Tukaki, the chairman of the National Māori Authority, Nga Ngaru Rautahi o Aotearoa.

Tukaki said the Commerce Commission, which is due to complete a market study into the $22 billion groceries industry in March, should “absolutely” consider recommending the forced sale of Foodstuffs and Countdown’s Four Square and Fresh Choice stores as an option to help make way for a third player.

“Four Square stores are dominant players in regional and rural communities with high Māori populations, so that could be one way of dealing with it,” Tukaki said.

“It has got to be an option among many things that need to happen.”

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Nga Ngaru Rautahi o Aotearoa chairman Matthew Tukaki says a third player needn’t be Māori owned, but there would be advantages for everyone if it was.

Several iwi are understood to be interested in bankrolling a venture called Northelia, supported by 2degrees founder Tex Edwards who has advocated for an alternative downsizing of Countdown and Foodstuffs spanning out from larger cities.

2degrees was also born from a partnership with Māori. One of its founding assets was radio spectrum that was offered to Māori at discount by the Government in lieu of a Treaty of Waitangi settlement, and for which Māori in return received shares in 2degrees.

Edwards has advocated for a deeper split that would see Countdown and Foodstuffs forced to sell a proportion of their Countdown, New World and Pak ‘n Save branded stores.

The extent of Māori interest in an overhaul of the supermarket industry became clearer in a raft of submissions made by iwi and other Māori organisations in the final formal round of consultations with the Commerce Commission, released just before Christmas.

The submissions also saw Foodstuffs and Countdown continue to push back on a break-up, with Countdown suggesting it would reduce the resilience of food supply chains to deal with disasters such as earthquakes, pandemics and volcanic eruptions.

Tukaki said on Friday that the National Māori Authority was not commercially involved in Northelia and the important thing was that there was a third player “whether it be Māori, non-Māori, Chinese or whoever”.

But he said the authority would “of course advocate for a Māori-owned and operated supermarket chain”.

“It could be a co-investment model that has shareholders that are a mix of Māori and non-Māori and everyone else in between.

“My primary goal is to lift the ownership and income aspirations of Māori and to reduce health disparities and if we do all of those things then we increase our net contribution to the economy – it is so hard for some Non-Māori to understand that with aspiration comes massive positives for the economy.”

The advantage to non-Māori of iwi involvement in the industry would “come down to the prices that consumers pay at the supermarket shelf,” Tukaki said.

“The third operator, if it is Māori-owned and operated, then rest assured we're going to see fairer prices –that has to be the message.

“When you see an iceberg lettuce, for example, selling for $5 and an avocado before the glut selling for $4.50, it's cheaper to go down to McDonald's and get a happy meal than it is to make a healthy dinner for your family.”

Māori businesses were already major players in the food industry, accounting for half of the country’s fishing quota, 30 per cent of lamb and beef production, and 10 per cent of dairy and kiwifruit production, Nga Ngaru said in its submission, quoting Ministry of Foreign Affairs and Trade figures.

“If you have a look at who drives the trucks and who mans the logistics in the warehouses around the country you will find a high proportion of the workforce is Māori,” Tukaki said.

“We're just not ‘front of house’; we're back of house.”

Involvement in retailing would be a natural progression, he said.

Ngāi Tahu Holdings general manager of investment Sam Inglis told the commission it would consider an investment opportunity in detail, if one became available.

It has played its cards close to its chest, not contributing to the commission’s market study but offering talks with the commission and confirming it had held initial discussions with “parties formally submitting into the process”.