Supermarket wrap: Watchdog petition, Countdown’s price freeze scrutinised

by | May 10, 2022 | News

The country’s two big supermarkets Countdown and Foodstuffs earned headlines this week when announcing winter price freeze on selected essentials. Critics say they’re not so super. New Zealand supermarket profits are more than twice what they should be, says advocacy group Consumer NZ. Meanwhile the selection and timing of the the winter price freeze came under closer scrutiny.

Stop the Super Profits petition

Consumer’s Stop the Super Profits petition, launched this week, asks Minister David Clark to revisit the Commerce Commission’s grocery market study recommendations and reconsider regulating access to wholesale grocery supply.

“Every day the supermarkets are taking more than $1 million in excess profits from our collective back pockets. These profits are twice what they should be. We need more competition to drive down prices and give New Zealanders a fairer price at the checkout,” said Jon Duffy, Consumer NZ chief executive.

In an open letter to Minister Clark, Consumer asks for regulations to create a more even playing field for new and existing grocery retailers. “No-one is going to start up a competing supermarket without reliable access to wholesale groceries, but currently the duopoly dominates access to wholesale supply”, said Duffy. “The Commerce Commission has recommended the supermarkets consider supplying other retailers. We think this is unrealistic to expect from an entrenched duopoly used to calling the shots. That is why we’re launching a petition.”

“We recognise that food prices are going up for a variety of reasons, from the pandemic, to inflation, to the impact of the war in Ukraine on wheat prices. We’re not disputing this, but excess profits on top of already high food prices are a slap in the face for households struggling to put food on the table” says Duffy. “There’s power in numbers and we need to show the government that people want action”.

According to Consumer’s Sentiment Tracker, New Zealander’s are increasingly worried about the cost of living. Last year, 63% of respondents picked food and grocery costs as their biggest cost-of-living concern. In a recent poll, 98% of respondents said they were worried about the price of groceries.

In the weeds with the winter price freeze

Sensible and compassionate – or a cynical play? Following the positive media coverage of this week’s ‘great winter price freeze’, the move came under closer scrutiny. Former Countdown retail worker and Spinnoff contributor Jacob Flanagan ran the numbers to see if the supermarket campaign delivers any real value for shoppers. The resulting  deep dive into the Countdown price freeze reveals reveals some odd inclusions. Five of the six items from the meat and seafood department are smoked salmon products, with the sixth item streaky bacon. One “essential” pack of salmon is price-frozen at $90 per kilogram.

In a list dominated by highly-processed foods, other critics also noted a disappointing lack of fresh veggies. Health author Niki Bezzant​ expressed concern over the range of products included. Of the 629 items, 19 are alcoholic drinks, 37 are snacks and sweets, 22 are biscuits and more than 30 are dessert items. Carrots, potatoes and pumpkins are the only fresh produce included. Other items on the list, including Mighty Fresh bread and Countdown baked beans, have increased in price since late last month.

The campaign for change

The Spinnoff, April 26 — Taking on the supermarket duopoly
Stuff, Mar 10 — Business as usual for supermarkets, while shoppers are still being ‘shafted’

Stuff, Jan 7 — The grocery staple that never goes on special
1 News, Oct 20 — Unlikely allies: Open letter from Consumer NZ and the Food & Grocery Council

The Spinoff, Aug 11 — The not-so-special supermarket deals
The Detail, RNZ, Nov — Sneaky, shady, shifty – supermarkets are under scrutiny

Photo by Victoriano Izquierdo on Unsplash

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