Foodstuffs ‘10 Points’ Fail To Show Their Proposed Merger Would Lower Supermarket Prices

A 10-point list published by Foodstuffs citing value for customers if their North and South Island operations are able to merge, flies in the face of research which shows they are making excessive profits while Kiwis pay some of the highest prices for food in the world.

The Grocery Action Group (GAG) says not one of the “10 things” Foodstuffs has published on a social media site provide any evidence of how its application to merge its North and South Island stores would lower the price of groceries for ordinary consumers, says GAG chair Sue Chetwin.

“The 10-points ignore the fact that between them Woolworths and Foodstuffs control more than 80% of the supermarket trade, and that Kiwi consumers are paying well over the odds for food and groceries,” Chetwin says.

“The 10-points seem more like an effort to pile on the pressure for the Commerce Commission to allow the merger. GAG strongly opposes it, believing it would lead to a signficant reduction in competition in a market where there is already very little.

“In Australia, where two supermarkets enjoy 65% of the market, a Senate inquiry there recently recommended allowing its regulator to order divestment of stores if that would help competition.

“GAG strongly believes our Government should be looking at similar tools here for our regulator.

“The Foodstuffs 10-points on LinkedIn seems designed to get the backing of its 43,000 staff and suppliers while ordinary consumers pay the bill. 

“Foodstuffs also claims the mandatory Grocery Supply Code that came into force in March this year which provides for the duopolists to deal fairly with suppliers will somehow lower prices for consumers.

“Foodstuffs doesn’t seem to see the irony of the fact they had to be dragged kicking and screaming to accept this, but are now citing it as a way for consumers to get better prices,” Chetwin said.

“The 10-points offer nothing new. Consumers will continue to pay high prices if this failed market is not further regulated.

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