New Zealand wants to force supermarkets to give competitors access to wholesale units

People walk in front of a supermarket on Lambton Quay Street in Wellington, New Zealand July 23, 2020. REUTERS/Praveen Menon

WELLINGTON, Aug 24 (Reuters) – The New Zealand government said on Wednesday it plans to introduce regulations that would force the wholesale branches of supermarkets to give competitors fair access to their groceries and other products unless they do so voluntarily .

The shift comes as New Zealanders grapple with inflation at 7.3%, the highest in three decades. It also follows other government measures aimed at increasing competition in the sector, which is dominated by two supermarket chains – Foodstuffs, a local cooperative, and Countdown, which is owned by Australia’s Woolworths Group Ltd (WOW.AX).

Under the new rules, if supermarkets don’t allow other retailers access to their wholesale stores, a regulator would step in and force them to sell at competitive prices.

Both companies said they are working to open up access and are not opposed to the rules, including setting up a regulatory backstop.

“Our priority, to which we are committed, is to find a commercial solution to provide wholesale access to retailers who are not members of our cooperative,” a Foodstuffs representative said in an emailed statement.

Spencer Sonn, chief executive of Woolworths New Zealand, which runs Countdown, said in a statement that Woolworths is actively working on a wholesale channel and is on the verge of landing its first multi-store wholesale customer.

The New Zealand government hopes the new rules will allow other retailers, like corner shops, to grow and offer products cheaper.

“This work will improve competition, and competition will improve prices,” Trade and Consumers Secretary David Clark said at a news conference.

Other measures introduced by the government last year include restrictions on land banking by supermarkets and the creation of a regulator.

Reporting by Lucy Craymer; Editing by Edwina Gibbs

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