Aldi 'one of the players' considering setting up in NZ, Robertson says

Tuesday, 31 May 2022

Aaron Beck, former Stats NZ senior manager for pricing, social and population insights, explains the food price index.

German discount supermarket chain Aldi is among the grocery players considering entering New Zealand’s market, the deputy prime minister says.

Grant Robertson spoke to RNZ about the Government’s response to the Commerce Commission’s report on supermarkets.

It accepted 12 of the commission’s 14 recommendations but suggested going further on two of them, including requiring the existing duopoly to open their wholesale arms to competitors.

It said if the supermarkets could not find a way to do so voluntarily, a regulatory regime would compel them to.

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It will also introduce a code of conduct, a sector regulator and unit pricing, which makes it easier for customers to compare what they are being charged.

The commission found that a lack of competition meant New Zealand supermarkets were making $1 million a day in excess profits.

The Government wants to make it easier for a new competitor to enter the market, or for existing independents to grow.

Robertson told RNZ he did not want to “put out there” the names of foreign companies that might want to establish a foothold in the New Zealand supermarket market.

But he said there were a number that could if it became more competitive. “There are definitely people who are interested.”

Aldi has been operating in Australia since 2001.

He said people could look to the Australian market. “Aldi is definitely one of the players.”

Aldi has been approached for comment.

The German grocer has more than 10,000 stores in 20 countries.

One reason its prices are so low is that most of the groceries it carries are under its home brand, and it also only carries the most commonly purchased grocery items in the most popular sizes.

The supermarket opened its first Australian store in 2001 in New South Wales, shaking up the grocery sector in Australia, which at the time had only two competitors, Coles and Woolworths.

By 2011, Aldi had 6.7% of the market, which increased to 12.4% by 2020.

Aldi has been registered with the New Zealand Companies Office since 2000, and has previously said it was not looking to launch in New Zealand any time soon.

Existing competitors, such as The Warehouse, Supie and Night ’n Day, may also benefit from the supermarket shake-up.

Robertson said there was already evidence of The Warehouse taking more steps into grocery retailing.

In a statement from The Warehouse, the retailer said New Zealanders “deserved better value”.

“We welcome the range of actions announced today as a positive step. We’re encouraged by the direction the Government is taking as wholesale access to supply at fair commercial terms is key to a more competitive grocery industry and ultimately lowering prices.

“While little changes in the short term for other players like us to enter the grocery market in a bigger way, we are very focused on supporting Kiwi families and remain committed to offering New Zealanders greater value on grocery and pantry items.”