By Mike Bain: The Daily Examiner.
Economic Growth Minister Nicola Willis has announced a series of measures aimed at delivering better deals for supermarket shoppers in New Zealand. The government is determined to address the lack of competition in the grocery sector, which has led to high prices and limited options for consumers.
On Sunday she announced, she was issuing a Request for Information (RFI) asking potential supermarket challengers—both in New Zealand and overseas—what regulatory changes are needed to help them compete at a national scale and drive grocery prices down.
“At the same time, I have asked officials for advice on ways in which the grocery sector could be restructured to increase competition,” Willis said.
New Zealand’s grocery prices are among the highest in the world, a situation exacerbated by the dominance of two major players—Foodstuffs and Woolworths. This duopoly has its roots in a series of mergers over the past 30 to 40 years, which consolidated market power and reduced competition.
Despite recent reforms, the market remains stagnant, leaving Kiwi shoppers without access to competitive grocery offerings.
Historically, New Zealand’s food chains have evolved significantly.
In the late 19th and early 20th centuries, the country established robust commodity chains for exporting dairy and meat products to international markets.
However, the domestic grocery sector has seen a different trajectory, with increasing consolidation leading to the current duopoly. Efforts to introduce competition have faced challenges, including regulatory barriers and the significant market power of existing players.
The purpose of the RFI is to identify the regulatory and legislative steps necessary to facilitate increased competition at scale. Willis is seeking information from a range of potential investors on what it would take for one or more new grocery retailers to enter the market on a national scale or for existing competitors to grow to sufficient size to materially increase competition.
“I also want to know what regulatory and commercial barriers to competing potential new entrants see and what they would like the Government to do about those barriers,” Willis added.
Recognizing the need for more significant action, Willis has commissioned specialist external advice on ways in which the existing supermarket duopoly could be restructured to improve competition. Options under consideration include a possible demerger of existing entities.
“Officials are working with the appointed advisors to explore all possibilities. In mid-2025, once I have considered the evidence from the RFI and the Commission’s work, I will bring further recommendations to Cabinet,” Willis said.
“No decisions have been made yet, but if Cabinet decides legislation is necessary, I expect to introduce it to Parliament by the end of the year.”
The government’s commitment to fostering genuine competition in the grocery sector is clear. All options are on the table to ensure Kiwi shoppers benefit from fair prices and greater choice.
