Barrie Saunders: Supermarkets – what about the provinces?

Anyone who drives to Gisborne, as I have done from the north and south, will discover the roads are winding and often tedious. This means getting in produce such as groceries, incurs significant costs because of the distance and small population served. Particularly challenging for perishable meat, dairy, fruit and vegetables.

The National Party’s policy of splitting Food Stuffs into two, thereby separating Pak’nSave from both New World and Four Square, runs into some practical difficulties when it comes to the likes of Gisborne, which has a Pak’nSave a Woolworths and two Four Squares, but no New World.

This means there will have to be three different delivery systems bringing groceries to Gisborne instead of the present two – one for Woolworths and one each for Pak’nSave and the two Four Squares. That’s a lot of extra cost for Gisborne consumers. How will the Four Squares be competitive with larger Pak’nSave?

I believe this arises in part from the very urban middle class lives of Nicola Willis and Christopher Luxon. The same urban elite obsession led the Ardern Government to limit grocery shopping during Covid to supermarkets, excluding smaller meat, fruit and vegetable shops, at the same time as they criticised the major chains for “price gouging”.

Our current private sector arrangements ensure those living remotely can access most of the goods and services available to urban people. It is “the invisible hand”, not the government, which ensures this delivers for Kiwis.

I agree with those who criticised the major super markets for anti-competitive activity including the legal but offensive use of the RMA to block competition from operating supermarkets. I commend the Commerce Commission and the Government for exploring the barriers to entry and ways to facilitate the entry of new super market operators. May that process continue.

National’s policy to break up the two NZ owned cooperative structure would likely be less damaging than Labour’s proposed separation of distribution from retail, or The Greens loopy state supermarket nationalisation, but it’s still appalling.

I find unconvincing the policies validation, with qualifications, by economic consultants Sense Partners. As a former Government Relations consultant I used economic consultants a lot. However a real world lens needs to be laid over any proposal they support. To me National has failed totally. It appears they did not even test drive with it with their own caucus.

Only ACT seems to have retained its head on this issue.

Politicians in the USA, UK and Australia are also obsessed with what they say is a cost of living crisis, so it’s nothing peculiar to NZ. We have to live with high energy costs which impact the food chain. Meat and dairy products are extremely expensive but don’t blame the supermarkets. They are expensive everywhere because demand is high worldwide. Great for NZ farmers, just not consumers.

We can only hope that in the event of a National led government, either ACT or the Commerce Commission will effectively block this unfortunate proposal. If it’s a Labour led government expect real damage for both Foodstuffs and consumers. There will be one winner however – the Australian owned Woolworths. Will that be an own goal?

Barrie Saunders has a background in Government Relations and blogs at www.barriesaunders.wordpress.com. - where this article was sourced.