ComCom reassures MPs supermarket study on track and consultations robust

Thursday, 17 February 2022

Commerce Commission chairwoman Anna Rawlings presents the commission's draft report into the grocery sector in July.

Commerce Commission chairwoman Anna Rawlings has reassured MPs that the Covid pandemic and any concerns supermarket suppliers may have had about speaking out about competition issues haven’t derailed its market study into the industry.

The commission is due to publish its final report into the $22 billion groceries industry on March 8, after concluding in a draft report that supermarket groups Countdown and Foodstuffs – which is comprised of separate North Island and South Island cooperatives – were making “persistently high profits”.

It is widely assumed the commission will recommend a mandatory code of conduct overseen by an independent ombudsman or adjudicator to oversee the relationship between supermarkets and their suppliers.

But there is no consensus on whether it may also recommend the two supermarket groups be forced to sell stores to make way for more competitors.

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With a decision just weeks away, there is still no consensus on whether the Commerce Commission may go as far as recommending the full or partial break-up of Countdown or Foodstuffs.

The suggestions made by submitters and speculated possibilities include recommending Foodstuffs be required to sell its Four Square franchised chain, unwinding the 2002 takeover of Woolworths NZ by Progressive Enterprises, and a more centrally-planned programme of store divestments.

Responding to questions from Parliament’s Economic Development, Science and Innovation select committee on Thursday, Rawlings said the commission had engaged in a “really robust consultation process”, including with parties that it had not been in contact with prior to its draft report in July.

“That's contributed to our consultation process which will all feed into our final report, but pending that report, that's probably as far as I can take that today,” she said.

Rawlings agreed some parties with interests in the sector might have been reticent about giving evidence to the commission, to protect their interests.

The commission had been “acutely aware” some supermarket suppliers might not have wanted to contribute to the study for that reason, she said.

“Our process factors that in,” she said.

“We … have a set of guidelines that includes provisions relating to anonymity and confidentiality.”

The final report would address the extent to which Covid-related matters had impacted its findings “but in large part the report stands independent of the Covid operating environment,” she said.

The commission’s market study could only make recommendations, she said.

“When that report is published and we've recorded our recommendations, they become a matter for the minister and government.”