The public needs transparency around a deal the Commerce Commission has struck with Foodstuffs over its anti-competitive
land covenants in the North Island, the Grocery Action Group (GAG) says.
“The public has a right to know just how much this has cost them over decades,” said Sue Chetwin, GAG’s chair.
“It’s very likely consumers have paid several billions of dollars more than they should have at the checkout as a result
of these anti-competitive land covenants,” she said.
“While it’s great the Commerce Commission is taking this court action, the terms of the agreement must not be kept a
dark secret.
“The public deserves and expects to know the size of the settlement undertakings.
The Commission announced today it was taking action against Foodstuffs North Island alleging anti-competitive land
covenants were used to block competitors from opening rival supermarkets in particular sites and developing existing
ones at several sites across the lower North Island. It said the parties had entered into a settlement to resolve the
proceedings on terms acceptable to both parties.
“Any orders made by the High Court “in due course” in relation to the land covenants, as announced by the Commission
today, could well give Foodstuffs a licence to keep intact the gains they have already locked in,” said Chetwin.
“The impact on consumers' wallets from these anti-competitive land covenants goes back at least 20 years, during which
time our supermarkets’ duopoly has made excessive profits, according to the Commission's own market report in 2022.
“Even allowing for other factors, the cost to consumers from the lack of competition due to these land covenants alone
could easily amount to several billions of dollars.
“We think consumers should know precisely how much these land covenants have cost them.
“We are also suspicious about the timing of this announcement given that this Friday the Commission is due to say
whether Foodstuffs North Island will be allowed to merge with Foodstuffs South Island.
“If the merger is allowed to proceed, Pak'nSave, New World and Four Square supermarkets will gain even more market power
and consumers will lose out.