ACT’s plan to increase supermarket competition

“While other parties destroy investor confidence by proposing break-ups, price controls, or state-run alternatives. ACT will focus on the barriers that make it hard for new competitors to enter the New Zealand market,” says ACT Leader David Seymour.

“The disease of New Zealand politics today is cynical, focus-group driven, knee-jerk reactions to large problems. Politicians hear a complaint and try to play the hero by attacking a group of New Zealanders as the scapegoat of the hour.

“This politics erodes the trust and certainty needed for investment and innovation. It’s careless about the long-term effect on our country so long as those behind it think they’ll get a short-term political gain.

“We’ve seen it over and again these last six years as prices have risen as fast as, or faster than, wages. When petrol felt expensive, Jacinda said we were being ‘fleeced’ by the petrol stations. When rents went up, new taxes and regulations were put on landlords. When butter was in the news, it was Fonterra, then electricity companies, then banks, now supermarkets.

“None of this pile on mentality has made life more affordable. It’s usually ended with another layer of regulation and bureaucracy, such as the Grocery Commissioner and supplier code. New Zealand has simply been left divided and blame-happy by this pattern of political behaviour.

“The current pathway is too complex and too costly for entrants to take the risk. You have to deal with dozens of regulators - The Commerce Commission. MPI. WorkSafe. IRD. Customs. NZTA. The Privacy Commissioner. Police. MBIE. And then your local council. If you want to operate in more than one town, that's not one council, that's every council, each with their own rules, timelines and processes.

“And then there's resource consent. To open one new supermarket in New Zealand, on average, you are looking at two years and a million dollars before you’ve laid a brick.

“ACT would create a one-stop consenting shop for new market entrants - a single point where a business looking to open, or open multiple sites, can get their consents, their liquor licences, their approvals, in months, not years.

“A one-stop shop means the next entrepreneur who wants to build the next Kai Co doesn't need a team of consultants and two years of patience just to get out of the starting blocks.

“We’ll also change product labelling laws. Right now, anyone selling imported food not labelled for New Zealand has two options. They can do an expensive run of product packaged specifically to our regulations, or they need to unload pallets, open each box, and stick nutrition labels over each product individually. That’s why the Dr Pepper you get at the dairy has a little white sticker over the nutrition panel.

“ACT will allow food labels for trusted regulatory systems like UK, EU and US by default. This will lower the barrier to entry for international supermarkets, who will no longer need to do expensive runs of products specifically for the tiny Australasian market to open stores. ACT will roll out the welcome mat.

“We’ve seen the impact of heavy-handed intervention with the oil and gas exploration ban. When the Government signals that successful businesses can simply be broken apart, potential new entrants are less likely to invest here.

“Ironically, draconian regulations can make supermarket competition worse. We won’t get Aldi, or Coles, or Walmart to come to New Zealand if they believe it’s politically fashionable to attack their investments after a few bad polls. Already, the previous Government had to exempt Costco from supplier obligations or they wouldn’t come.

“Rather than joining the race to the bottom where we attack successful businesses, ACT’s policy is to make it easier for new businesses to come here, compete, and expand.”