Willis lashes ‘supermarket lobby’ in economic speech

Thursday, 13 February 2025

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Finance Minister Nicola Willis has used a keynote economic speech to lay the groundwork for a third major player to enter New Zealand’s market to compete with the nation’s supermarket duopoly

As revealed in The Post on Thursday morning, Willis has used the New Zealand Economics Forum at Waikato University on Thursday morning, to lash what she called “the supermarket lobby” and put Foodstuffs and Woolworths on notice that she thinks consumer are getting a “raw deal” and that the Government is ready to act to support a new player.

“Over the past 12 months, international supermarket chains and local investors have expressed interest in entering the New Zealand grocery market, Willis told the crowd assembled in the Pā at the University of Waikato

“I want to help them succeed.”

“We owe it to Kiwi shoppers to help remove the barriers that could get in the way of a new entrant,” she said.

Willis said she won’t consider any sort of Government-owned supermarket, as was floated under the previous Labour Government.

But she leaned into things that the Government can control- flagging looking at the Overseas Investment Act, Resource Management Act, local government regulations and any other red tape or regulatory hurdles that it thinks have worked to stymie competition and which the current supermarket chains - Foodstuffs and Woolworths NZ - have weaponised against potential competitors.

“If Kiwi food producers can’t afford to keep their products on New Zealand supermarket shelves, how are they ever going to grow to the point where they can export overseas?

“The supermarket lobby will find 1000 different ways to say this is not the case, but it is,” she said.

Willis also made the case that New Zealand has too much market concentration that has prioritised efficiency over consumers, creating big fish in many markets, she said.

“New Zealand has seen significant mergers and consolidation across major industries. Big fish have been swallowing the little fish and regulatory barriers have stopped new fish from entering the pond,” she said.

“While many super-sized businesses have flourished, in too many cases the Kiwis they sell to have experienced higher prices, fewer choices and a worse deal all round.”

The finance minister has been focused on competition issues since she came into the job and has made some moves she thinks will boost banking competition - such as starting to better capitalise KiwiBank.

But while the case for banking can be complicated, supermarket reform is seen within National as more of a slam dunk with a public that has faced inflation-fuelled price rises since the Covid-19 pandemic.

The previous Labour Government conducted a market study into the supermarket sector, but demurred from any major reform of the sector, instead appointing a grocery commissioner. Pierre van Heerden has been in the role since mid-2023.

“The major supermarket chains should listen up: our Government is on the side of Kiwi shoppers and we will act to defend their interests, ” Willis said.

Willis also used the speech to releasea new growth plan and website that the public can use to keep track of the Government’s growth agenda. The Government will report against progress on the goals.

Willis also flagged tax, energy and government procurement as key areas of focus for the Government

Government procurement - a sector worth billions of dollar each year - also looks set to head off on a new course.

“Those doing the procuring understandably play close attention to prices. That is as it should be. We want value for money.

“But getting value is not just about cost. Getting value is also about assessing the contribution particular contracts can make to New Zealand as a whole.”

“The Government wants the Government agencies doing the procuring to assess the value as well as the cost of contracts.”