The Commerce Commission has been told that New Zealand’s 4,000 plus owner-operated dairies and service stations are the
third way for both cheaper groceries and reduced car journey emissions.
“As dairies are in Kaitaia to Bluff and in our biggest cities and smallest towns, we are the third way for cheaper
groceries but were initially overlooked in the Commission’s draft report,” says Sunny Kaushal, chair of the Dairy and
Business Owners Group.
“Having made a written and now an oral submission on the Supermarket Price Inquiry, we can say that view has now
changed. “Dairies do not need taxpayer money or planning policy privilege. Mega operators, like Aldi, are big enough to
look after themselves with revenues of US$109bn in 2019 alone.
“Instead of ‘Think Big’ we said to the Commission to ‘Think Small.’ That's by empowering 4,000 plus local businesses to
deliver grocery items at lower prices. That’s good for us, it is great for consumers and it cuts unnecessary car
journeys in a win for the environment.
“We advised the Commission to structurally separate the supermarket duopoly’s wholesale and distribution centre business
units. This suggestion seemed to have a genuine cut-through.
“Doing this means that wholesale and distribution centres will compete with one another for suppliers and retail shelf
space. Whether a Pakn’Save or a dairy. Lower prices will be passed onto consumers in dairies because that means more
customers through our doors and with it, increased revenue.
“Supporting this idea is that most distribution centres are in Auckland, Palmerston North and Christchurch, with
Foodstuffs having others in Rotorua and Dunedin. There’s huge spin-off for hospitality in doing this because Foodstuffs
dominates wholesale food service.
“Ramming home our opportunity is Nielson research done for Z Energy’s 2021 Investor Day. This showed the grocery market
is worth some $19.6 billion, a bit smaller than what StatsNZ said in the Draft report, but with dairies and service
stations having 17.34% of the market.
“At $3.4bn, we may be small as individual businesses, but as a sector, we represent a huge opportunity for lower grocery
prices. Express-sized stores are massive overseas and these reduce the need for supermarket car journeys that generate
huge amounts of CO2 emissions. “The Commission seemed genuinely pleased to hear from dairy owners and to see a
representative body in the process of being formed.
“Covid-19 taught us that community bubbles are best and as a sector, we want to provide more than the essentials. "With
our colleagues in retail butchery and greengrocers, we can breathe life back into local shopping centres. That starts
with creating a fiercely competitive wholesale/distribution centre market,” Mr Kaushal said.