Grocery Sector Covenants Amendment Bill

3.6.22 Oral Submission of Justice & Peace Commission of the Catholic Diocese of Auckland to the Economic Development, Science and Innovation Committee on  Commerce (Grocery Sector Covenants) Amendment Bill

 

Peter

I’m Peter Garrick Executive Secretary of the Justice & Peace Commission of the Catholic Diocese of Auckland which is established to promote justice, peace, integral human development especially for the poor and marginalised in New Zealand society.

 

With me today is Loraine Elliott who is Vicar for Social Impact & Communication for the Diocese. Loraine comes with extensive experience in Health and Social Welfare particularly for Māori.

 

Loraine:

Kia ora. Our presentation today is based on the recognition of the human dignity and right to protection of all members of society particularly the most vulnerable.

 

The Commerce Commission study released on March 8 showed that major grocery retailers were earning excess profits of around $1 million a day.

 

We think that without regulation families will continue to be hostage to unfair prices for food and other basics. This would be particularly the case for Maori and Pacifika communities where food makes up a such a major part of the family budget.

Urgent action is needed in these areas.

We are very supportive of the intention of this Bill to prevent supermarkets putting restrictive covenants on land to block competitors to set up shop and provide competitive choice for customers.

Peter:

Like the slow train wreck of the housing crisis this duopoly has been allowed to occur over the past 20 years under the unwatchful eyes of Government administrations of different political stripes.

The Government is now on the back foot trying to repair the damage.

This Bill is a helpful first step but it needs to be very carefully framed.

 

We support suggestions in the submission from the New Zealand Food & Grocery Council to strengthen the Bill in three main areas.

Firstly by

·      Framing the prohibition on the anti-competitive covenants more broadly so that other forms of retail do not continue to suffer as the previous speaker has outlined so well

 

Secondly by

·      Ensuring lease agreements that feature various types of rights of first refusal (ROFR) don’t hinder the lease of the land to another supermarket or food distributor without significant penalty

 

and thirdly by

·      Ensuring supermarkets can’t unreasonably delay new developments by endlessly raising objections by resource to the District Plan or the Resource Management Act

 

But like the current housing crisis, alleviating the exploitation of consumers by the present Supermarket duopoly won’t be an easy fix. It will take determined, careful effort on many fronts in order to make a difference.

 

Loraine:

 

But it is encouraging that the Government has finally made a start with this very helpful first step.

 

Our families who are the victims of this abuse of market power require decision and effective action, hopefully with bipartisan support.

 

I work with these families on a daily basis through Catholic Social Services in South Auckland and know how much harder it is now to put food on the table. As a compassionate society who care about the most vulnerable in our midst we owe it to all of them to act firmly and decisively to stop this exploitation.

 

 

Peter:

 

As we point out in our written submission we urge the Government to also prepare legislation that will establish a dedicated regulator for the grocery sector who will be charged with

 

·      ensuring access to wholesale grocery items for new grocery chains

 

·      establishing an enforceable code of conduct between major retailers and suppliers to prevent exploitation in this area and as pointed out above

 

·      facilitating planning regulations about supermarket development so that developments are not endlessly delayed.

 

We thank the Select Committee for the chance to speak today. For your convenience I’ll email through what we have said today – and we’re very happy to answer any questions.

Additional reading

News category: Unlisted resources.