Latest / Early Edition with Ryan Bridge / Ernie Newman: Independent grocery sector consultant says Government should be focused on breaking up the current grocery sector

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Ernie Newman: Independent grocery sector consultant says Government should be focused on breaking up the current grocery sector · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: The government has reiterated its plan to encourage a third
• 0:04
  Speaker 1: player into the grocery sector. They're open to proposals, with
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  Speaker 1: lots of talk centering on an international entry to the market.
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  Speaker 1: The plan is to remove regulations that discourage new supermarkets
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  Speaker 1: and help new entrants access land. Former CEO of what
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  Speaker 1: is now the Food and Grocery Council, Ernie Newman, joins me, Now,
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  Speaker 1: thanks for your time this morning.
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  Speaker 2: Ernie, well impressive.
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  Speaker 1: Do you think we will attract international players with these moves?
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  Speaker 2: Honestly, no, I think the time has passed. I think
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  Speaker 2: the good thing is that nichol and Willison's all of
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  Speaker 2: a sudden to put competition right at the top of
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  Speaker 2: her priority live. But you know, we have enough supermarkets
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  Speaker 2: in New Zealand anyway. The problem we have is the
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  Speaker 2: concentration of ownership. So the correct solution to this at
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  Speaker 2: this point of time is to break up what we have.
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  Speaker 1: Okay, So if the government is serious about creating competition,
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  Speaker 1: they should be taking a look at the current industry.
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  Speaker 2: Absolutely, they need to dust off the falls from the
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  Speaker 2: the breakup of telecom and go down that track. And
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  Speaker 2: it can be done. There's plenty of you know, the
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  Speaker 2: international precedent for that sort of thing when competition comes unstuck.
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  Speaker 2: And we're welling to really past that point now.
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  Speaker 1: So what would they look like, Ernie, if you were
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  Speaker 1: breaking up the drop we already have.
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  Speaker 2: Yeah, if you take if you take the food stuff's group,
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  Speaker 2: for example, you know they've got pack and saved, they've
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  Speaker 2: got New World, they've got four square. They're all different
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  Speaker 2: what they call banot groups, and they present them as
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  Speaker 2: though they're competitors, but everybody knows they're not. You know,
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  Speaker 2: there's one one mister bigg at the head of all
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  Speaker 2: is who decides, you know, what the price today of
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  Speaker 2: potatoes will be at each of those into those stores.
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  Speaker 2: What we need is genuine competition where they are, they're
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  Speaker 2: completely independently own and they're dealing independently with customers and
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  Speaker 2: with suppliers. So that's that's the best solute and it's
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  Speaker 2: perfectly achievable.
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  Speaker 1: So for example, Ernie, if you had food stuff, you
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  Speaker 1: turn them into three seven ts to have you knew World,
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  Speaker 1: you pack and say in your four square and need
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  Speaker 1: compete against each other.
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  Speaker 2: Yeah, I'd be slightly more ambitious and to them before
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  Speaker 2: because there's a wholesale operation, and that needs to be
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  Speaker 2: split out as well. So that's the ideal to go
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  Speaker 2: four ways. But any step down that path, whether it's
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  Speaker 2: just splitting out one of them or we're all three,
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  Speaker 2: or including wholesale, any step in that direction, I think
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  Speaker 2: it's going to be a lot more productive than hoping
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  Speaker 2: that somehow a new entrant is going to turn up.
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  Speaker 1: And is there anything else that we can do? We
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  Speaker 1: want great competition with what we already have. Is there
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  Speaker 1: anything else that the government could be looking at?
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  Speaker 2: I really don't believe. So. I mean, they talk about,
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  Speaker 2: you know, removing regulation and making it easier for a
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  Speaker 2: new entrant. You know, we arguably have too many supermarkets already,
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  Speaker 2: so why would a new entrant come? And again, it's
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  Speaker 2: the kind of duopoly that we have sitting here just
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  Speaker 2: about the impossible. We're just about an impenetrable market. They can
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  Speaker 2: afford to wait for months or years to basically burn
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  Speaker 2: up a new entrant simply with a price war, So
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  Speaker 2: that won't work. It is the breakup that is the
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  Speaker 2: way to go on this.
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  Speaker 1: So, Annie, why do you think the talk is centering
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  Speaker 1: around international beds rather than looking at what we can
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  Speaker 1: you know already have here.
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  Speaker 2: I think because perhaps the government is a bit scared,
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  Speaker 2: particularly with the influence of the zand of the ACT Party. Sorry,
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  Speaker 2: I think you know they're worried about criticism that you know,
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  Speaker 2: they're in fearing in the in the role of business
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  Speaker 2: and whatever. But I don't believe that holds water. You know,
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  Speaker 2: you get to a point where competition is broken too,
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  Speaker 2: to the stage that that is the only action you
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  Speaker 2: can take.
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  Speaker 1: Do you think there are genuine proposals from a third party?
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  Speaker 2: I'd love to think so. I wouldn't be surprised. The
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  Speaker 2: question is whether it's a big enough scale to make
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  Speaker 2: a difference to the market and to survive long term.
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  Speaker 1: Annie Newman, really appreciate your time this morning. Thank you
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  Speaker 1: so much for that. That was former CEO of what
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  Speaker 1: is now the Mod and Grocery Council.
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  Speaker 2: For more from Early Edition with Ryan Bridge.
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  Speaker 1: Listen live to News Talks it Be from five am weekdays,
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