ComCom backs off additional regulations on supermarkets, after 20-month inquiry

Tuesday, 7 July 2026

Monopoly Watch spokesperson Tex Edwards has renewed his call for more controls on corporate lobbying after the Commerce Commission decided against additional wholesale regulations on supermarkets following an inquiry lasting nearly two years.

The commission instead promised to run the ruler over about $6 billion of “rebates” and other payments Foodstuffs and Woolworths extract from grocery suppliers each year and which it believes may be distorting competition, to see if they are allowed under existing rules.

Edwards has argued for a break-up of the supermarket chains, rather than additional wholesale regulations and did not directly criticise the commission’s decision.

But he said the commission had blinked by applying what he described as a “band-aid on a bullet wound”.

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“Supermarkets, banks and energy companies are running amok in Wellington. Every election candidate must debate lobbyist control,” he said.

The commission kicked off an inquiry into the supermarket wholesaling regime, under which the supermarket groups must make products they buy available to rivals, in September 2024.

As a last resort, it could have recommended the Government forced the supermarket chains to wholesale those supplies at prices and on terms and conditions set by the commission.

But grocery commissioner Pierre van Heerden said the commission had decided to focus its resources on putting the $6b of payments that flowed from suppliers to supermarkets “under the microscope”.

They can include charges for “shelf restocking, promotional support and aisle-cleaning”.

“We’ve concluded this is a better and faster way to address the negative impact of some of these payments, rather than additional regulation,” van Heerden said.

Former prime minister Jacinda Ardern forecast in 2022 that the wholesale framework would inject more competition into the groceries industry by “unlocking the stockroom doors” of Woolworths and Foodstuffs.

However, the commission reported last month that Foodstuffs and Woolworths’ share of the retail groceries market had been essentially unchanged over the past five years, averaging 82% last year.

Wholesale regulation can assist small competitors to the major supermarkets, such as convenience stores, by making it easier for them to access groceries at a price closer to those negotiated by the food giants.

However, the former government’s plan to make wholesaling the centrepiece of competition reform has been controversial, in part because of concerns it could backfire by entrenching Foodstuffs and Woolworths’ control over the supply chain.

The commission recommended against a mandatory wholesale regime when it completed its market study into the groceries industry in 2022, partly for that reason.

Former National Party commerce minister Andrew Bayly argued when in Opposition that, if the wholesaling experiment failed, shoppers would “probably end up in a worse place than where we are now”.

Industry sources have suggested the lacklustre interest in wholesaling to date has been partly down to a lack of co-operation by some food suppliers who have been keen to maintain their own relationships with buyers to avoid becoming more beholden to the supermarkets.

Wrapping up its inquiry, the commission said “rebates, discounts, and other payments” the major supermarkets charged suppliers could have a negative impact on new and existing competitors.

“These payments add backroom complexity and reinforce the low levels of competition in the grocery market,” van Heerden said.

“New and smaller entrants struggle to compete or grow as this practice allows the major supermarkets to use their market power to obtain prices from suppliers that other retailers can’t.”

Van Heerden said the commission was not suggesting the major supermarkets shouldn’t be able to negotiate hard for competitive prices.

“This is about the difference between the prices that large and small retailers have to pay for groceries and the impact of that on competition,” he said.

“While these payments aren’t unique to New Zealand’s grocery sector, they’re problematic because of our market structure where a few big players hold most of the market and so can distort competition.”

Raewyn Bleakley, chief executive of the Food and Grocery Council which represents grocery suppliers, said the commission’s report “recognised that additional intervention would not be proportionate given the associated costs and risks”.

“This reflects the experience of suppliers who have invested significantly in direct supply channels and continue to support independent retailers, challenger retailers and new market entrants where there are commercially viable opportunities to do so.”

The commission’s focus should continue to be on ensuring the grocery supply code was effective through monitoring, education and enforcement, she said.