Shopping centre leases allow Foodstuffs and Countdown to lock out new grocery competitors, and many others such as nail salons, fruit & vege stalls, sushi shops, even three years after leaving
Worse than I even expected. Duopoly Capitalism allowed by regulators. The only “consumer” redress is to hit them in the pocket. We will do our shopping locally as much as possible and avoid them.
I would be really curious to know if these rules have created the "food deserts" that I've heard about in low income areas of South Auckland and other regions where access to low cost fruit and vege is a challenge and negatively influences health outcomes.
I would also really like to know more about the iwi led operator that is in discussions. Would be great for any new competitor to be home grown to keep profits local. I wonder if the online grocers would open brick and mortar stores if these changes go thru?
Settlements have been accepted on behalf of all Māori to restore what was taken so I think it does behave Iwi to invest directly and cooperatively in business that directly enhances the living standards of all the people and where it is obvious inequity exists. Food is one but I’d say Housing and banking is more important. If none of us want our personal lives and Government in our personal affairs, bodies, lives or land and property undermined or invaded by Governments and Corporations and want them to stick to their role redistributing wealth, running free public services, safety and security, regulating and enforcing law without breaching our rights and freedom then money mean to go to enhance wellbeing and fix obvious inequity over generations needs to be used for that purpose I think. Not where we have seen it wasted on a few blokes ego trips and interests which seems a universal problem.
While I agree these sorts of closed-door deals are shady, I'm inclined to think of the supermarkets' actual secret weapon as garbage people like John Roughan (NZ Herald), laundering all bad behavior through the lens of 'look at all the progress we've made thanks to the free market'... Behavior like the supermarkets show is just the natural outcome of tricking ordinary citizens to turn a blind eye to this sort of stuff - because we've been told it's the only way we can have nice things.
I dont think there can be any doubt that both the caveats on titles and the lease clauses would come under restrictive trade practises for which there is existing legislation and stiff penalties. The existence of heavy secrecy clauses is a clue.
It would be good for these to be challenged in court and penalties applied because damage to fair competition has been done for decades and consumers always lose.
Hi Bernard. I hope you are recovering well from your bout of Covid-19. So......it seems clear all along that in fact Pak N' Save's ''Mr Stickman'' was actually Pinocchio in disguise....I thought so....
If we stand back a bit it gets clearer: NZ is too small to support a third supermarket chain (ask Aldi). The cost of running a third chain is above $420M per annum (quick and dirty maths but it stands up). The third chain would therefore mean that prices would probably go up ( or all chains have to be willing to run at much lower profit levels than present). More importantly, the carbon footprint of supplying supermarket food to the nation, ceteris paribus, would increase by 50%, yes?
Nor do we want one, monopolistic chain, there is a large food security benefit from having two chains.
So: We want two chains, which we have got, tick, AND we want to incentivise them to take a reasonable profit.
What is a reasonable profit?
When one thinks about how the supermarket chains have just brought us through Covid and the massive logistical problems that they solve every single day that we mostly never ever consider then my view that $420M is not an excessive margin for doing this at the bottom of the world (relative to their turnover).
The Duopoly is not broken so lets not try to fix it.
To further illustrate: For decades we had four or five oil companies supplying fuel. Four head offices, four human resources pyramids, four differently painted fuel supply trucks, four sets of tanks at each port, hundreds more petrol stations than we needed as a nation and on and on.
Its been improved but it is still using far more carbon than the ideal model to give us our fuel at the pumps.
Wow. This is mind-blowing. How much money have these businesses extracted from us for years, if not decades now by forcing limited competition? This market is seriously broken.
Also what about other retailers? Thinking Mitre10 and Bunnings for example. Do they similarly block competition in their lease clauses?
All of this should be totally illegal as it distorts the market.
This is sad commentary on the poor quality of investigative journalsim in this country. These exclusivity clauses seem to have persisted for several decades. Surely small businesses would have complained to the food and grocery council in the past. Why did it have to take a Commerce Commission enquiry to discover this flagrant breach of ethical behaviour by landlords of large malls. Aside from Z Energies reported exploitative land banking strategies, how many other industrial and commercial sectors have similar exploitive behaviour that are probably responsible for reportedly high commodity prices in NZ.
Outrageous conduct by supermarkets. Not going to be giving them more of my cash. Luckily in Wellington we have great fruit & vege markets, Island Bay Butchery (and others) and Moore Wilson's. Better up the food budget though!
Worse than I even expected. Duopoly Capitalism allowed by regulators. The only “consumer” redress is to hit them in the pocket. We will do our shopping locally as much as possible and avoid them.
Patrick Medlicott
I would be really curious to know if these rules have created the "food deserts" that I've heard about in low income areas of South Auckland and other regions where access to low cost fruit and vege is a challenge and negatively influences health outcomes.
I would also really like to know more about the iwi led operator that is in discussions. Would be great for any new competitor to be home grown to keep profits local. I wonder if the online grocers would open brick and mortar stores if these changes go thru?
Hi Bernard
In effect do a lot of small food manufacturers have only three customers - the wholesale arms of Foodstuffs North and South and Countdown?
Settlements have been accepted on behalf of all Māori to restore what was taken so I think it does behave Iwi to invest directly and cooperatively in business that directly enhances the living standards of all the people and where it is obvious inequity exists. Food is one but I’d say Housing and banking is more important. If none of us want our personal lives and Government in our personal affairs, bodies, lives or land and property undermined or invaded by Governments and Corporations and want them to stick to their role redistributing wealth, running free public services, safety and security, regulating and enforcing law without breaching our rights and freedom then money mean to go to enhance wellbeing and fix obvious inequity over generations needs to be used for that purpose I think. Not where we have seen it wasted on a few blokes ego trips and interests which seems a universal problem.
While I agree these sorts of closed-door deals are shady, I'm inclined to think of the supermarkets' actual secret weapon as garbage people like John Roughan (NZ Herald), laundering all bad behavior through the lens of 'look at all the progress we've made thanks to the free market'... Behavior like the supermarkets show is just the natural outcome of tricking ordinary citizens to turn a blind eye to this sort of stuff - because we've been told it's the only way we can have nice things.
I dont think there can be any doubt that both the caveats on titles and the lease clauses would come under restrictive trade practises for which there is existing legislation and stiff penalties. The existence of heavy secrecy clauses is a clue.
It would be good for these to be challenged in court and penalties applied because damage to fair competition has been done for decades and consumers always lose.
Hi Bernard. I hope you are recovering well from your bout of Covid-19. So......it seems clear all along that in fact Pak N' Save's ''Mr Stickman'' was actually Pinocchio in disguise....I thought so....
Please bear with:
If we stand back a bit it gets clearer: NZ is too small to support a third supermarket chain (ask Aldi). The cost of running a third chain is above $420M per annum (quick and dirty maths but it stands up). The third chain would therefore mean that prices would probably go up ( or all chains have to be willing to run at much lower profit levels than present). More importantly, the carbon footprint of supplying supermarket food to the nation, ceteris paribus, would increase by 50%, yes?
Nor do we want one, monopolistic chain, there is a large food security benefit from having two chains.
So: We want two chains, which we have got, tick, AND we want to incentivise them to take a reasonable profit.
What is a reasonable profit?
When one thinks about how the supermarket chains have just brought us through Covid and the massive logistical problems that they solve every single day that we mostly never ever consider then my view that $420M is not an excessive margin for doing this at the bottom of the world (relative to their turnover).
The Duopoly is not broken so lets not try to fix it.
To further illustrate: For decades we had four or five oil companies supplying fuel. Four head offices, four human resources pyramids, four differently painted fuel supply trucks, four sets of tanks at each port, hundreds more petrol stations than we needed as a nation and on and on.
Its been improved but it is still using far more carbon than the ideal model to give us our fuel at the pumps.
More players is not the answer.
Wow. This is mind-blowing. How much money have these businesses extracted from us for years, if not decades now by forcing limited competition? This market is seriously broken.
Also what about other retailers? Thinking Mitre10 and Bunnings for example. Do they similarly block competition in their lease clauses?
All of this should be totally illegal as it distorts the market.
This is sad commentary on the poor quality of investigative journalsim in this country. These exclusivity clauses seem to have persisted for several decades. Surely small businesses would have complained to the food and grocery council in the past. Why did it have to take a Commerce Commission enquiry to discover this flagrant breach of ethical behaviour by landlords of large malls. Aside from Z Energies reported exploitative land banking strategies, how many other industrial and commercial sectors have similar exploitive behaviour that are probably responsible for reportedly high commodity prices in NZ.
Outrageous conduct by supermarkets. Not going to be giving them more of my cash. Luckily in Wellington we have great fruit & vege markets, Island Bay Butchery (and others) and Moore Wilson's. Better up the food budget though!