Labour's Arena Williams argues if the Government was serious about tackling high prices, big corporates would already be changing their behaviour

By Arena Williams*

There’s a curious irony in Andrew Bayly’s resignation as a Minister. For the few New Zealanders who knew his name, it was largely due to questions about his personal conduct. Yet, until this week, he was the Minister responsible for tackling the number one issue on voters’ minds: the cost of living.  

Despite inflation easing since 2022, the latest IPSOS Issues Monitor shows Kiwis still rank the cost of living as their biggest concern. You wouldn’t know it from the way this Government operates. As Minister for Commerce and Consumer Affairs, Bayly was meant to take on uncompetitive sectors and bring prices down. Instead, he was a junior Minister, just like his newly promoted replacement, Scott Simpson. 

Much has been written about the circumstances of Bayly’s departure. But once the headlines fade, Kiwis will still be paying too much at the checkout, at the pump, and on their mortgage. The Minister tasked with fixing that is gone, and his replacement has been handed a weak supermarket reform plan that ACT is poised to stifle.  

This lack of urgency on competition reflects a deeper pattern. Week after week, the coalition drifts from one internal squabble to the next. Luxon keeps promising to "refocus" his Government, but the only thing consistent is the chaos.  

If the Government were serious about tackling high prices, the big corporates would already be changing their behaviour. But instead, what signals are we seeing?  

In early February, NBR reported on Foodstuffs North Island CEO Chris Quin’s response to the Commerce Commission rejecting their proposed merger with Foodstuffs South Island (a decision they are now appealing). He admitted that the company had not put enough effort into government relations, saying, “Up until five years ago, our standard operating procedure was just to keep our heads down and sell groceries to New Zealanders. We had no serious, formal connections in Wellington.”  

What does it tell us when one half of our supermarket duopoly decides it needs to ramp up its lobbying efforts? Instead of competing to offer lower prices - something the Grocery Commissioner has said is “limited and muted” in New Zealand - it’s apparently more effective to cosy up to Government Ministers.  

Unfortunately, that might be an accurate assessment. This Government has shown little interest in cracking down on corporate power. David Seymour, now acting Minister of Commerce and Consumer Affairs, has been openly hostile to regulation. ACT opposed creating the Grocery Commissioner role in the first place, and Seymour dismissed the last Grocery Commissioner's report as just a bureaucrat justifying his job. 

Meanwhile, Nicola Willis has now waded in, saying she’s open to “doing a deal” with a third supermarket entrant - something Labour was also working on. But when pressed on how the Government would help, she pointed to tweaks to the Overseas Investment Act (which they were already planning) and Resource Management Act reform (after scrapping years of work on a better alternative). If this is their master plan, then Willis needs to get her Cabinet colleagues in line and make it happen.  

But what happens if a third entrant doesn’t materialise - or isn’t enough to break the stranglehold of the duopoly? This Government needs to start thinking beyond its comfort zone.  

The Grocery Commissioner has zeroed in on the wholesale market, which is heavily controlled by the duopoly. One option is forcing Foodstuffs and Woolworths to supply independent retailers on fair terms, so they can’t charge competitors more than their own stores.  

Tex Edwards, founder of 2 Degrees, argues the real issue isn’t too few supermarkets but too much market control. A bold step would be forcing the duopoly to sell off stores in key areas, breaking up their dominance rather than waiting years for a new competitor to build from scratch.  

The Grocery Action Council has also highlighted the need for action on land banking—where the duopoly buys up land suitable for new supermarkets, then sits on it to block competition.  

Christopher Luxon might be hoping his new Commerce Minister can simply keep out of trouble. But Kiwis need more than that. They need action to bring down the cost of essentials. And they need a Government that’s focused on their concerns - not just its own internal dramas.

*Arena Williams is the Labour Party MP for Manurewa and the Party's Spokesperson for Commerce and Consumer Affairs.