TLDR: Momentum is growing towards a supermarkets-style breakup of Fletcher Building’s GIB monopoly, reinforced by the Government’s increasing focus on blaming monopolies for at least some of the inflation that is eroding its popularity and has driven consumer confidence to record lows. Paid subscribers can see more detail and analysis below the paywall fold, and leave comments on further lines of inquiry.

Elsewhere in the news overseas and here this morning:
Auckland GPs report a winter flu crisis has spilled back out of A&E departments and into their surgeries (NZ Herald), while Wellington’s DHBs are giving vouchers for patients to visit GPs instead of coming to A&Es (RNZ) and the Government denied the health system was in crisis (RNZ);
Wellington Council faces a once-in-a-generation decision this afternoon over whether to approve a new 1,281 page District Plan that would enable an extra 73,400 homes in the City over the next 30 years; (Dominion Post)
The NZ Super Fund is among the bidders Spark’s mobile towers seen worth NZ$1b; (The Australian-$$$)
Kelloggs announced overnight surprise plans to spin off its North American cereals business, including its Cornflakes brand, and keep its snacks group, including Pringles chips and Cheez-It crackers; (Reuters)
Russia warned NATO member Lithuania of ‘serious consequences’ if it continued its blockade of trains through its territory to the Russian enclave of Kaliningrad; (BBC) and,
US stocks rose 2.5% this morning as bargain hunters sorted through the rubble after the market’s 6% fall last week and its 20%-plus fall this year , although it’s not clear this is a ‘bottom’ in the latest slump or another dead cat bounce. CNBC
GIB carveup and Placemakers spinoff nearer
Members of a GIB crisis taskforce set up by new Building and Construction Minister Megan Woods yesterday have called in the past for the forced sale of Fletcher Building’s GIB monopoly and its Placemakers hardware chain.
The political momentum is building towards a supermarkets-style breakup of Fletcher Building’s 95% share of the plasterboard market after the appointment of Simplicity Living’s Shane Brealey and anti-monopoly campaigner Tex Edwards, both of whom have proposed Government-imposed interventions in the past, to Woods’ new taskforce yesterday. Edwards also wants to see BRANZ, the industry-dominated setter of building material standards, abolished.
The minister also threw in a warning to Fletcher Building in her announcement not to try to enforce the trademarks on its new coloured versions of GIB.
Attention will now turn to the Commerce Commission’s draft report from its ongoing market study into building materials. That report is due next month and its final report is due in December.
Grocery duopoly measures toughened
Woods’ announcement came as Commerce Minister David Clark announced a toughening of the Government’s legislation yesterday to stop supermarkets using land covenants and lease exclusivity provisions to block competitors.
The select committee considering the Grocery Sector Covenants Amendment Bill recommended in its report a widening of the application of the bill to stop the grocery duopoly blocking non-grocery retailers from shopping centres and handing over policing of the rules to the Commerce Commission.
The bill passed its second reading in Parliament last night with the support of all parties. Hansard
Consumer confidence collapses to record low
It was the best of times. It was the worst of times.
Westpac published its McDermott Miller survey of consumer confidence for the June quarter yesterday, showing the worst result in the survey’s history since it started in 1988. That is worse than in the depths of the Global Financial Crisis, worse than in the deep recession of 1990 and 1991 when unemployment rose to 10.9%, and worse than in the initial panic phase of the pandemic in March 2020.
It is extraordinary, considering home-owning households are sitting on net wealth gains of over $700b since the onset of Covid and unemployment is at a record low 3.4%, along with gross earnings per job having risen faster than CPI inflation (see RBNZ chart below) since the onset of Covid, even if hourly wages are currently not.
(Not) going to Harvey Norman?
The indicators of consumer confidence fell violently across the board, including for buying a major household item. This contrasts with recent relatively buoyant sales figures for white goods and household items such as TVs and couches.
So what? - Consumer and business confidence are good leading indicators (usually) for economic growth and for political support for the Government. This year is turning into both a summer and a winter of malcontent for Labour.
Quotes of the day
Bear rally or capitulation?
“The outstanding question is whether this is simply a bounce or the bottom. I think that this could certainly be a bounce but not the bottom because the one missing ingredient is a fear-based capitulation sell-off.” Sam Stovall, chief investment strategist at CFRA Research via CNBC
“We were overdue a bear market rally, as being down for 10 out of eleven weeks is a bit extreme. It doesn’t really change the bigger picture of growth slowing down and tightening financial conditions.” Hani Redha, multi-asset portfolio manager at PineBridge Investments via FT-$$$.
Chart of the day
Less worried than before in short run, but freaked about long run
Number of the day
Consumer spending doesn’t match the ugly consumer sentiment
$1.7b - Seasonally-adjusted durables spending via credit and debit cards in May, which was unchanged from May a year ago and up 0.2% in seasonally adjusted terms from April. That’s despite the record low figures for consumer confidence overall and intentions to buy major household items.
So what? - In my view, something weird is going on with our collective economic psyche, or at least how we answer surveys. I blame social media…
Comment of the day on The Kākā
The problem with BRANZ
“Bernard, it would be interesting to dig into Branz to better understand it’s governance structure and whether it is fit for purpose for our time. It seems to me that it’s questionable that a private organisation should have so much control over materials in the NZ market, especially given the pressures in housing here.” Harrison on yesterday’s Dawn Chorus.
Some fun things


Ka kite ano
Bernard
I wonder how much of the fall in consumer confidence is linked to the fact that people can see their KiwiSaver balance on their banking apps? Apart from the sharp fall and associated increase during the March 2020 Covid crisis, this will be first time that people have seen their retirement savings wealth fall dramatically, at the same time that mortgage rates and prices are going up.
Yes, that’s me and (combined with inflation) is certainly depressing my mood.
I wondered that too. It's super panic-inducing. I try not to look at it but I can't help myself.
Hi Tara. Just remember, this is a long term investment, unless you need the money for a deposit on your house, you have plenty of time for your KiwiSaver values to return. DONT change anything at the moment. If you want any more reassurance, let me know, and I will show you the information on bear markets that we shared with our clients. They do bounce back as long as they are real investments. Take Care.
I know this but it doesn't mean that it isn't a scary thing.
Agree it seems weird that consumer spending is not yet reflecting the forward looking view of consumers ... interest rates are only just starting to take a bigger bite out of consumer spending power, so I suspect we will see consumer spending slow up pretty quickly over the next 6mths. In addition, I hear the credit stress in unsecured lending is starting to emerge over the last 6 weeks. Might be worth chatting with Centrix on this.
Looks like we will talk ourselves into a recession even though economic conditions such as wage growth & unemployment are historically performing really well. As long as the media keeps highlighting the bad news it will become a self fulfilling prophecy.
Gary Dyall
Hi Voice of Reason I agree but it’s also the depressing world news that we read, see or hear everyday which doesn’t make for happy or joyful times.
Another piece of evidence in the puzzle of low consumer confidence and collective worry: My paediatrician wife says she and her colleagues have never seen (in her case over a 40 yr career) so many children presenting with high anxiety. Presumably reflecting their parents state of mind.
Hi Stu
After the ChCh quakes in 2011 it was seen that children's responses were affected by their parents. If mum and/or dad were weepy and panicky then so were their kids more likely to be as well. Whereas if mum and/or dad treated it more as an adventure (turning the under-the-table into a campsite) the kids responded in a more positive manner.
A variation on fight or flight?
Parents are people too who need to feel hopeful and supported to raise children. Especially Mother’s.
Hi Bernard, could you dive into how fit for purpose the consumer confidence index even is? It feels incredibly flawed on a number of levels. Firstly, as you pointed out, due to the fact the statistics do not reconcile with the survey, which reflects the power of certain stories being told and held, regardless of the reality. Secondly, (and perhaps more importantly) the fact we are still seeking to assess people's engagement and understanding of the economy based on their intended consumption, in a midst of global converging crises, where "consuming" our way out of global warming and biodiversity loss isn't physically possible and in fact perpetuating the crisis. I wonder if it was replaced with a citizen confidence index (informing on engagement on policy and strategy in governments and organisations big and small - per Jon Alexander's suggestion), or removed entirely as a distraction would be more helpful? Cheers, Georgia
I couldn't agree with this comment more, thanks for pointing this out. Personally I loath being considered a 'consumer', makes me feel like a machine of planetary destruction.
I've recently read Jason Hickle's book 'Less is More' on Degrowth, it's brilliant and I'm seeing the status quo economy through a very different lens these days.
100%, Jason Hickel is exceptional. If you enjoyed that, I highly recommend reading Tim Jackson's Postgrowth (ecological economist and also brilliant BBC playwright, so also entertaining) and Jon Alexander's recent book Citizens (not consumers) which explores this from a marketing perspective.
Thanks for the recommendations! Adding them to my list. The way people have been framed as consumers instead of citizens increasingly in news media since the 1970s, is highly problematic.
To share a recommendation back to you, I've really been enjoying the Planet Critical podcast and substack by Rachael Donald. She interviews many incredible systems thinkers https://www.planetcritical.com/
I agree. Language is so important. I watched in disbelief as language change featured so highly as a tool in the palace coup conducted by neoliberals back in the 80s/90s. I worked in psychiatry bad / mental health good. Patients bad / clients consumers good. As professional staff i was consumed until I existed no more and some managers somewhere grew fatter.
We need to reclaim language. I for one feel sick at what I am supposed to consume. We are citizens not consumers.
Is it possible to segment the consumer confidence data by household type or age?
You talk often about "household wealth is increasing", but that really only applies to households which actually own property, which I think was 64% at the last census. If you could segment the consumer confidence and look at 19-30 year olds, or households who don't rent by choice, you might see a slightly different story. (Or maybe you'd see the exact same story, but you can't know until you try.)
Our mass psyche, behavioural economics, slump in consumer confidence…… the difference between past decades and now is the conveyor belt of “the sky is falling down” doom merchant predictions on the front page, 6 o'clock news, Twitter, Facebook and every which way you turn. China threats, Ukraine, Covid, 501s, global warming, the list on goes…. Misery loves company. Plenty of data says we live in a more prosperous time than ever before – better health & education, less poverty, less wars, less crime…..globally.
The citizens feel powerless, badly served, isolated and constantly at risk. No one wants to see their neighbours or community fail or be risked either. There are no optimistic projections nor action on what will help us all and the public is not silly anymore, greater forces than the individual are dictating our free will, support and lives. Hateful lying and inequity being covered up and normalised conduct really. So people has lost confidence in authority and Goverrnment. This morning Chris Hopkins admitted he lied about offering Charlotte Bellis consulate support. What can get done with people who abuse their power over us like that? Sorry doesn’t cut it and it endangers women, pregnant women at that. She is a higher profile women than most who get mistreated by those who should and can be supportive in power. I think there is a crisis in confidence in politics, governments and the related financial, military, industrial complex risking us all and getting much richer for it. Really they’ve been beck owned by facts now matter how hard the establishment tries to obfuscate or suppress them.
1. What kind of military police and institutions can’t keep our borders secure or a virus out? By good process.
3. What kind of Government could allow something like the level of clear exploitation and abuse evidenced in schools and the abuse in care as well as Gloriavale continue?
3. What kind of morons believe human babies don’t need their human Mothers with them 24/7 to be well and supported?
4. Who thinks old winding and narrow roads were built for massive trucks?
The list goes on and on….
I don’t think this survey reflects only financial dissatisfaction after all they’re constantly TELLING us we need a million dollars at least each to retire and then put as many barriers in front of us all as possible throughout our lives. I think everyone is fed up with it all. It’s become one step forward two back and politicians seem blithely unaware and unable to put in place the necessary reforms.
Especially for women, children and the vulnerable. It’s a mans world still. Despite being illegal and immoral corruption. No one wants to say it they’re still “playing the game” without any consideration of facts or evidence. The silencing and infantilising of women isn’t an accident.
Are you sure Hipkins lied Kath? There is a real difference in being given some information (especially if it is from a usually reliable source) that turns out to be incorrect, and straight lying, which means that Hipkins would have known it was incorrect when he spoke. I don't know what the situation was here, although Hipkins recent statements only admit to the former.
It’s ugly because they/he misused power to smear and deprive (anyone but..) a vulnerable pregnant woman (NZ citizen)in a war zone with crazy misogynist religious zealots with primitive views about women and everyone and everything else actually. So from that standpoint it was a nasty nasty thing to do based on bullshit. Which is really all our Government seems to do. Cowards. So whether it was a purposeful lie or whether he is capable of it is moot really. He did the damage and caused a pile on from all the other dickheads on her and at that time, condition and place.They can’t even screen at the border either. People SHOULD be upset about their illegal misuse of power against individuals if we want to get to being a functional, safe liberal democracy for everyone and not a country of lawless, theiving, lying ,irresponsible,unconscionable manbaby boys club. Who smear, erase, abuse women and children with impunity. Rot and dirty old habits starts and is showcased here at the top.
Heres a new take on the imminent food miles issue that may give our farmer's apoplexy https://www.nature.com/articles/s43016-022-00531-w
Your comments would of course be appreciated!
Hi Bernard, I agree that its not that simple to change from one plasterboard to another for residential construction. The bracing calculations for the house will need to be checked to ensure there's enough "bracing units". This is easily checked for GIB as they provide handy calculators that work together with their other proprietary products (GIB handibracs, ceiling diaphragms, etc). Councils, Architects and Engineers have confidence in this product from years of experience and performance in previous earthquakes. Any new imported system will also require relevant testing data before designers have the confidence to sign their names to it.
Goodness Bernard, blaming social media for our growing disbelief in dystopian capitalism? My mother assured me that rockin’roll and Beatle haircuts were responsible!
An intelligent article by David McLeish. In line with much that you have been saying, Bernard.
https://fisherfunds.co.nz/newsroom/market-commentary/what-if-rate-hikes-are-doing-more-harm-than-good?utm_source=marketingcloud&utm_medium=email&utm_campaign=FF+Newsletter+June+2022+Main
That's a great article, Jim. Supply shortages & not excessive demand are the cause of our inflation & the RBNZ's big hikes in the OCR are worsening the situation. This reinforces my belief that it's dangerous for the RBNZ to be independant of the government. This independance gives the RBNZ the power to derail the government's monetary policies with the government powerless to stop it. The RBNZ was established by National in 1934 as the government's monetary arm,to implement the government's monetary policy. It was made independant by that economic illiterate, Roger Douglas & like all neo lib policies, we're now paying the price.
Maybe the fall in so-called consumer confidence reflects a realisation that we can't keep on spending our way through climate emergency, that we don't actually need half of what we buy and that shelter, warmth, food and water plus the odd book is really the only things we need (and to replace the odd washing machine etc.) I adopted an unshopper model a while ago & it saves a lot of time, money and bother. Shopping became a hobby for many of us but Covid maybe changed our attitude a little to hanging out in malls. Also the world became way more uncertain, and people looked to their own backyards in the form of buying out seeds, compost and plants. I am thinking that health has become a big priority as has the environment, food and the joys of seeing family and friends. I do look at those container ships and wonder what things are actually needed (apart from gib and sending our processed wood back to us).