“We must back the hard workers, those who go the extra mile, who toil day in day out to make progress for themselves and their families. The dairy owner who works twelve hours a day, six days a week, with one week off at Christmas.”
The above two paragraphs are inspiring; words I could have written in defence of the diligent, productive and determined Kiwis who have worked impossible hours to build and own their small share of the Foodstuffs co-operative and did so in a country that believed in protecting the property rights of its citizens.
Well. I did not write them. Nicola Willis did. They come from her maiden speech.
We are in the ferment of a hysteria. Food is expensive, we are being asked to believe, not because of structural drivers creating friction in the wheels of commerce but due to the avarice of a few who are profiting at the expense of the many.
This is not true. The Commerce Commission exists to suppress anti-competitive behaviour and is incentivised to find it. Despite their 420 staff and $95 million annual budget, they failed. Let me quote from the 2022 report:
This is not true. The Commerce Commission exists to suppress anti-competitive behaviour and is incentivised to find it. Despite their 420 staff and $95 million annual budget, they failed. Let me quote from the 2022 report:
Christopher Luxon and Nicola Willis. Photo: Stuff
“The three major grocery retailers’ profit to sales margins are broadly consistent with those of a sample of overseas grocery retailers. However, we have not given significant weight to this observation, as to reach a robust conclusion from a direct comparison would require a detailed examination of each overseas retailer’s business and operating context.”
That paragraph should have ended this debate. It did not. Despite the evidence of a competitive sector the Commission, in its 609 page report, had to fall back on a subjective assessment on the cost of capital in order to speculate that there was a possibility that these firms were enjoying $420m in excess profits.
“The three major grocery retailers’ profit to sales margins are broadly consistent with those of a sample of overseas grocery retailers. However, we have not given significant weight to this observation, as to reach a robust conclusion from a direct comparison would require a detailed examination of each overseas retailer’s business and operating context.”
That paragraph should have ended this debate. It did not. Despite the evidence of a competitive sector the Commission, in its 609 page report, had to fall back on a subjective assessment on the cost of capital in order to speculate that there was a possibility that these firms were enjoying $420m in excess profits.
We know from published accounts these profits do not exist other than in the bureaucratic imagination. Woolworths, an Australian company with close to a third of the NZ market, wrote down the value of its Kiwi holdings by $1.6 billion in 2024 on the back of rising cost of sales and weak profitability, just $108 million before taxes and interest on a whopping $8 billion in revenue.
We are not going to reduce grocery prices by harassing the people who sell groceries any more than we are going to make computers cheaper by regulating Noel Leeming and PB Tech. What the public want is a villain. Willis and Luxon have now delivered one.
Well. Let me point you, dear reader, towards the real culprit. This government has failed to significantly reduce state spending, deliver a fiscal surplus, reduce the number of core government servants, pass a replacement for the Resource Management Act, confront a crippling welfare bill, address the unsustainability of our universal pension regime and ignored the catastrophic funding gap bankrupting ACC.
But wait…didn’t we get tax cuts? Well. Yes. But. If you were earning 100k in 2023, the tax cuts were worth a shade over a grand. By now, with inflation, you would be on around 106k, and given a marginal rate of 30%, you will be paying an extra $2k in real terms.
National is willing to sacrifice the property rights of a group of citizens subject to vilification on flimsy evidence because it is politically convenient to do so. Think about this for a moment. What does it say about the leadership of this country that they are willing to adopt an economic strategy that they know will not work, is in violation of their principles, and at the expense of the rights of honest and law-abiding citizens for short-term political gain?
Now. To tone down my own rhetoric. This policy is measured. It will require the pro forma approval of the Commerce Commission, and those affected will be compensated. We are not replicating the sins visited on the kulaks and the Americans periodically undertake such ‘trust busting’ policies, without causing the sky to fall.
But we are not America. We are a small, isolated island nation at the bottom of nowhere. This announcement itself adds to the perception that New Zealand is not a safe place to invest and the political hostility to supermarket retailers is an active deterrent to new entrants.
I can forgive inchoate babble from our friends in the Greens because they understand economics as well as I understand fashion. What I cannot forgive is politicians knowing what they are doing is wrong, but choosing to do it anyway.
The only winner here is Chris Penk; who is not required to subject himself to the absurd contortions of his former colleagues defending this insidious policy and whose desire to force a change in party leadership has been vindicated....The full article is published HERE
Damien Grant is an Auckland business owner, a member of the Taxpayers’ Union and a regular opinion contributor for Stuff, writing from a libertarian perspective
We are not going to reduce grocery prices by harassing the people who sell groceries any more than we are going to make computers cheaper by regulating Noel Leeming and PB Tech. What the public want is a villain. Willis and Luxon have now delivered one.
Well. Let me point you, dear reader, towards the real culprit. This government has failed to significantly reduce state spending, deliver a fiscal surplus, reduce the number of core government servants, pass a replacement for the Resource Management Act, confront a crippling welfare bill, address the unsustainability of our universal pension regime and ignored the catastrophic funding gap bankrupting ACC.
But wait…didn’t we get tax cuts? Well. Yes. But. If you were earning 100k in 2023, the tax cuts were worth a shade over a grand. By now, with inflation, you would be on around 106k, and given a marginal rate of 30%, you will be paying an extra $2k in real terms.
National is willing to sacrifice the property rights of a group of citizens subject to vilification on flimsy evidence because it is politically convenient to do so. Think about this for a moment. What does it say about the leadership of this country that they are willing to adopt an economic strategy that they know will not work, is in violation of their principles, and at the expense of the rights of honest and law-abiding citizens for short-term political gain?
Now. To tone down my own rhetoric. This policy is measured. It will require the pro forma approval of the Commerce Commission, and those affected will be compensated. We are not replicating the sins visited on the kulaks and the Americans periodically undertake such ‘trust busting’ policies, without causing the sky to fall.
But we are not America. We are a small, isolated island nation at the bottom of nowhere. This announcement itself adds to the perception that New Zealand is not a safe place to invest and the political hostility to supermarket retailers is an active deterrent to new entrants.
I can forgive inchoate babble from our friends in the Greens because they understand economics as well as I understand fashion. What I cannot forgive is politicians knowing what they are doing is wrong, but choosing to do it anyway.
The only winner here is Chris Penk; who is not required to subject himself to the absurd contortions of his former colleagues defending this insidious policy and whose desire to force a change in party leadership has been vindicated....The full article is published HERE
Damien Grant is an Auckland business owner, a member of the Taxpayers’ Union and a regular opinion contributor for Stuff, writing from a libertarian perspective
5 comments:
Rubbish = I must have been imaging it when Foodstuffs was prosecuted and found guilty in court of buying up land where potential competitors may set up and using protective land covenants to block them. The only amazing part of National and Willis policy is that they have been in bed with Big Food and Banking & now are panicking due to polling numbers. Luxon has reversed his position of the past three years during which he wrongly pushed contestable markets theory as a solution, which the duopoly loved because they knew it would have no effect. No election campaign ever in NZ has seen policy reversals, hypocrisy, lobbying & industrial scale lying as much as Election 2026.
It is near on impossible to have any confidence in Nicola Willis. Her timid unimaginative approach to the economy, and now this Argentina model big government interference is it as far as it can go to trust her. She'd be far happier in Labour.
National will poll in the low 20's at this rate, deservedly.
To Robt MacCulloch - " you forgot to add the same attributes, from the same company toward "their" suppliers when Stephen Tindall, The Warehouse - publicly stated that His Company was going to set up an In-House Supermarket system, to counter the then {and still} duoply".
Interesting that our "current" MSM do not research that one.
Also, with Ms Willis, no one {even within NZ MSM} challenged her on the 'so called talk' with then CEO Fonterra (TVNZ showed on the news a wonderful video clip of said gent, walking away from Parliament, following said chat) about 'price of butter' when it was known that Fonterra was in the process of selling off their lucrative Dairy Brand.
You're quite right Damien, but I also understand where National are coming from. To win the election, they have to woo the swing voters who are currently being seduced by the Opportunity Party. They are not the sharpest knives in the drawer. But unfortunately they have a vote, and they determine who will govern us for the next three years. So intelligent MPs have to swallow a dead rat and promise them something that they know is plain stupid. Maybe National could have honoured their promises as soon as they were elected, and maybe the swing voters would have stuck with them despite the cacophony from the radical Maori, the bureaucrats, and the media. But it would have been a huge risk, because the swing voters are deeply uncomfortable with conflict. Just comfort yourself with the thought of how much worse it will be if they swing the other way on 7 November.
It is quite surprising to me that National did not parachute Nicola Willis into Chris Penk's seat when it became vacant .It is a very secure seat.
Just Maybe , Nicola will not make it through the list if the very strong feeling sweeping NZ is Not to Party Vote National , electorate vote only for National and split your Party vote to either ACT or NZF,
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