Latest / Best of Business / David Seymour: Regulation Minister on the new report calling for tougher regulations for the grocery sector

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David Seymour: Regulation Minister on the new report calling for tougher regulations for the grocery sector · Best of Business

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  Speaker 1: You're listening to a podcast from News talks'd be follow
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  Speaker 2: Regulation Minister David Seymour is rubbish and calls for tougher
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  Speaker 2: regulation in the grocery sector. On Wednesday, the Grocery Commissioner
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  Speaker 2: released his first report into the state of the supermarket sector,
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  Speaker 2: and it was scathing. The Commissioner said there had been
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  Speaker 2: little meaningful improvement and competition, and said he would launch
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  Speaker 2: further inquiry into wholesale offerings to help. Commerce Minister Andrew
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  Speaker 2: Bailey has backed the Commissioner's approach, but ACT is promising
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  Speaker 2: a pushback and to discuss regulation. To discuss this regulation,
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  Speaker 2: Minister David Seymour is with me now, thanks so much
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  Speaker 2: for your time, David, Good.
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  Speaker 3: Morning, Good morning Francesca.
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  Speaker 2: What were your thoughts on the report.
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  Speaker 3: Well, you can see why they've done it. First of all,
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  Speaker 3: people have been hard up for three or four years
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  Speaker 3: now with inflation and it's the groceries that people really feel.
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  Speaker 3: You know, you see people getting something having to take
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  Speaker 3: it out of the trolley because they're budgeting so tight.
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  Speaker 3: So there's an obvious political lightning. Rod The last government
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  Speaker 3: created this grocery Commissioner passed a pretty lengthy piece of
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  Speaker 3: legislation called the Grocery Industry Competition Act. And then, of
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  Speaker 3: course every year this grocery commissioner has to produce a report.
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  Speaker 3: So he's produced one and said everything's terrible, we need
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  Speaker 3: more rules and regulations. Well, hang on a minute. I
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  Speaker 3: mean that was the basic story that we had when
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  Speaker 3: he was put in place. And when he started doing
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  Speaker 3: these reports, they created a whole lot of rules, such
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  Speaker 3: as saying that the grocery store has to sell to
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  Speaker 3: its competitors so that they can compete with them at
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  Speaker 3: a greed price. And a whole lot of things got
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  Speaker 3: put in place. And what's interesting about the report is
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  Speaker 3: the only place where things seem to be getting a
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  Speaker 3: little bit better is there's a bit more competition in Auckland,
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  Speaker 3: because you've got your ethnic supermarkets, you've got your fresh,
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  Speaker 3: you've got your cost Co. All of a sudden, you see,
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  Speaker 3: maybe a light bulb goes on. What we need is
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  Speaker 3: more competitors and more competition. But actually the more rules
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  Speaker 3: and regulations you put on them, the less likely that is.
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  Speaker 3: So what I would say is yep, big problem, big
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  Speaker 3: political issue, but What we actually need to do is
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  Speaker 3: take the real lesson, which is more regulation has really
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  Speaker 3: done much. What does tend to work is getting more
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  Speaker 3: competitors in. And you know my view, we need to
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  Speaker 3: open up investment from overseas because there's chances are the
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  Speaker 3: competitors going to come from there. So we're doing that
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  Speaker 3: with the OA. We're going to change resource management law
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  Speaker 3: so it's actually easy to build things. So you could
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  Speaker 3: imagine an older for example, coming in and building the
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  Speaker 3: distribution centers, building the stores and the framework. But those
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  Speaker 3: are not putting in more rules. It's actually taking the
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  Speaker 3: rules away, so it's easier to get more competition.
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  Speaker 2: You may we should probably make it clear that you
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  Speaker 2: weren't in some port of the creation of the Growthery
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  Speaker 2: Commissioner in the first place. I'm presuming David, that your
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  Speaker 2: mind hasn't changed regarding that role.
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  Speaker 3: No, well, I don't think that it was a good
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  Speaker 3: idea to create them. That You've got to remember also,
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  Speaker 3: I'm part of a comfort So ultimately, what are our
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  Speaker 3: government supports? I support, But you know a few people
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  Speaker 3: of usked or do you advocate for less regulation and
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  Speaker 3: later rules so that you can get more business done? Well,
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  Speaker 3: yes I do, and I just make a point about
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  Speaker 3: values that. You know, it's kind of easy to point
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  Speaker 3: out what's wrong and say it's those guys alter and
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  Speaker 3: I've been too successful, but that's too big, that've made
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  Speaker 3: too much money. But I just feel at some point
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  Speaker 3: in New Zealand, we're going to have to start asking ourselves, okay, sure,
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  Speaker 3: how do we make it better? Oh?
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  Speaker 2: I think that's exactly what people want to hear. As
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  Speaker 2: a shopper, I would really like to know to see
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  Speaker 2: some tangible difference in the next few months. You know,
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  Speaker 2: when I leave the supermarket the impact it has on
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  Speaker 2: my wallet. You made a comment that of regulation cut prices,
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  Speaker 2: we would already have the cheapest groceries in the world.
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  Speaker 2: So do you think that supermarkets are already overregulated or
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  Speaker 2: are we regulating the wrong things.
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  Speaker 3: I think a whole economy is overregulated, and that's why
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  Speaker 3: the government has a ministry for regulation. At the sport,
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  Speaker 3: it's only quity people, But you've got someone out of
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  Speaker 3: the thirty government departments who's actually saying to the others,
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  Speaker 3: wait a minute. People are spending too much time on
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  Speaker 3: rules and regulations and they're not spending enough time on
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  Speaker 3: being able to get on with doing whatever it is
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  Speaker 3: that I'm doing. I mean, I'm actually just on a
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  Speaker 3: Sunday morning walk and I'm opposite an early childhood center
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  Speaker 3: in the EPSOM electorate. I remember visiting it and they
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  Speaker 3: told me that every morning they wake up they have
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  Speaker 3: to follow three hundred and three rules. And people wonder
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  Speaker 3: why we have cost problems with early childhood. The people
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  Speaker 3: they're spend too much time on compliance, not enough time
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  Speaker 3: bringing up, looking after and expanding the minds of small children.
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  Speaker 3: So yes, I would say right across the board, we're overregulated,
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  Speaker 3: and the solution to many of our problems is to
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  Speaker 3: reduce the compliance time and increase their productive time.
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  Speaker 2: So if we're going to create more legitimate competition without
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  Speaker 2: the regulation and as you said, you know, open up
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  Speaker 2: to overseas investments, clear up the resource management, make that
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  Speaker 2: easier bringing competition. None of that is going to happen overnight.
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  Speaker 2: That's long term thinking to have an impact on our
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  Speaker 2: grocery sector, isn't it? Is there not a place for
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  Speaker 2: what the Grocery Commissioner is suggesting when he is going
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  Speaker 2: to consider asking, you know, can we require the major
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  Speaker 2: supermarkets to help to sell wholesale products to their small
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  Speaker 2: rivals at the same rate that they sell it to
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  Speaker 2: their stores. Is that not a simpler, quicker way of
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  Speaker 2: creating some competition, Should it not also be.
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  Speaker 3: Considered Well, we have a version of that now, and
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  Speaker 3: you know it appears to have worked. I went to
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  Speaker 3: the opening of a supermarket in Hamilton about six months ago,
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  Speaker 3: which has benefited. Some of their products come from that,
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  Speaker 3: so they've gone out as an independent grosser. But the
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  Speaker 3: flip side of it is when Costco came to town,
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  Speaker 3: they gave them a five year exemption from the requirement
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  Speaker 3: to sell to others because Costco said, look, this is
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  Speaker 3: just nuts. We got to work out the price of everything,
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  Speaker 3: what's a reasonable price to deliver it, how soon do
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  Speaker 3: they want it, what sort of batch sizes are they having.
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  Speaker 3: All of that's going to affect the price. Of course, Actually,
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  Speaker 3: we're not going to come to New Zealand if you
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  Speaker 3: make us do that. So I just make the point
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  Speaker 3: that you know, sure, you can say it's a great idea.
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  Speaker 3: The government will step in and force some companies to
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  Speaker 3: sell to other companies at a quote unquote fair price.
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  Speaker 3: But when it comes to calculating that price, it's another
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  Speaker 3: the bureaucracy, and see if it really was there. And
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  Speaker 3: actually the working example is that when we did get
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  Speaker 3: a big competitor who I think we need a lot
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  Speaker 3: more of the likes of Costco, they actually had to
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  Speaker 3: be execpt did from that rule. Because these rules don't
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  Speaker 3: just help competition, they also hither it. Now, I just
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  Speaker 3: make the point that there's a lot of areas where
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  Speaker 3: people will say, well, the solution to this is going
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  Speaker 3: to take five years. I point to the electricity situation.
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  Speaker 3: There's no government can get more water in the dams overnight.
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  Speaker 3: There are things you can do to get more investment
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  Speaker 3: and energy, but that takes years. I look at the
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  Speaker 3: housing situation. You know, there's not a lot you can
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  Speaker 3: do to get an extra fifty thousand houses built overnight.
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  Speaker 3: I think most of the big problems that New Zealand
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  Speaker 3: faces actually have multi year solutions. And then someone comes
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  Speaker 3: along and says, and I'm not blaming you, but you say, oh,
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  Speaker 3: I want something that works tomorrow. And then I say, well, yes,
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  Speaker 3: but that won't actually solve the problem. And there will
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  Speaker 3: always be some people I say, I don't care. I
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  Speaker 3: just want action. I think, to be honest, if we're
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  Speaker 3: going to get to be the place that we all
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  Speaker 3: know New Zealand can and should we all dream of,
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  Speaker 3: then it is going to take some sort of more
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  Speaker 3: honest things Ingham and so longer term thinking to solve
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  Speaker 3: some of these issues.
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  Speaker 2: Commerce Minister Andrew Bailey has backed the report and supported
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  Speaker 2: the approach of the commissioner. Do you think he's jumped
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  Speaker 2: the gun on those comments.
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  Speaker 3: Well, I've seen what Andrews said officially, you know, his
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  Speaker 3: press release on the Beehive website says that actually he's
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  Speaker 3: actual less red tape and less regulation. So that a
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  Speaker 3: few people in the media have tried to say that
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  Speaker 3: me and Andrew are saying different things. I'm not sure
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  Speaker 3: we are. But in any event, what neants to happen
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  Speaker 3: if the government is going to make any policy changes
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  Speaker 3: in response to the Grocery Commissioner's suggestions, then what happens
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  Speaker 3: that's got to actually come to Cabinet, have the discussion,
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  Speaker 3: make the agreement, and then potentially take a law to
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  Speaker 3: Parliament that then gets debated by all the MPs, not
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  Speaker 3: just the government, and if that passes through then it
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  Speaker 3: becomes a law. So there's a bit of water to
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  Speaker 3: go under the bridge. But I've just you know, when
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  Speaker 3: people have asked me, I've just said, well, you know,
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  Speaker 3: we have actually tried putting more rules and regulations on,
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  Speaker 3: and even the guy that's responsible for putting them on
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  Speaker 3: says it hasn't worked. So maybe it's time to you know,
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  Speaker 3: as they say, ty Hall, and think about all what
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  Speaker 3: is the underlying problem? How can we solve it? And
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  Speaker 3: I would say it's easier to invest from overseas and
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  Speaker 3: easier to develop property under resource management law, and the
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  Speaker 3: government is actually taking those things on. I think, you know,
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  Speaker 3: quite quite boldly, and I think it's long overdue.
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  Speaker 2: Minister. Thanks so much for your time, appreciate the channel.
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  Speaker 2: Let you get back to your walk. It's a nice
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  Speaker 2: morning out.
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  Speaker 3: There, isn't Yeah. Yeah, well look spring spring is here
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  Speaker 3: and you know the temperatures are getting higher and inflation
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  Speaker 3: and interest rates are slowly getting lower. So I know
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  Speaker 3: it's been a bloody tough winter, but I think we
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  Speaker 3: are starting to turn the corner.
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  Speaker 2: Thank you so much. That was David Seymour.
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