Historic merger data torpedoes economic vandals

“The inquisition-style hysteria gripping the election has suffered a serious blow by historic data showing supermarket mergers didn’t raise prices,” says ACT Leader David Seymour. 

“Every party bar ACT is competing to attack grocers in the most disruptive way possible this election, but drastic measures require rock-solid justification. The savings from break-ups are small, far into the future, and will be cancelled many times over by ordinary food price inflation before they arrive and that’s all assuming their most hopeful claims are true.

“However, data released today casts doubt on those claims altogether. The logic of the MBIE paper released by National is that supermarket mergers overseas have led to price increases, therefore a demerger here will lead to similar price decreases.

“Data reported by Radio New Zealand shows that New Zealand food prices have tracked Australian and OECD average prices since the early 1990s.

“In other words, the merger did not lead to price increases. In fact, prices appear to have fallen compared with other countries in the years after the early 2000s merger. So, the whole justification for the breakup is shot.

“New Zealand has a serious challenge with productivity, wages and the cost of living. We will not solve it by making this country a more frightening place to invest, build a business, employ people and take risks.

“Confidence in this country suffers when politicians decide to scapegoat and attack legitimate businesses. We saw it with the oil and gas ban, and now every other party is proposing intervention in the grocery sector.

“We need to get real in this country. Yes, there is a problem with productivity, wage growth, and inflation, but singling out sectors and blaming them for our woes won’t fix it.

“The solution will be to cut the red tape that stops new supermarkets being built, welcome new investment into New Zealand, and create the conditions for competitors to challenge the incumbents.

“Attacking legitimate businesses on the flimsiest of evidence and damaging our country in the hope of short-term political gain takes New Zealand in exactly the wrong economic direction.”