Latest / Early Edition with Ryan Bridge / Ernie Newman: Grocery Policy Expert on food prices being the fifth in the developed world

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Ernie Newman: Grocery Policy Expert on food prices being the fifth in the developed world · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: The Commerce Commission's latest grocery reports out, and not much
• 0:03
  Speaker 1: has changed, big two supermarket chains dominating still eighty two
• 0:06
  Speaker 1: percent market share. We're paying the fifth highest price in
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  Speaker 1: the developed world, apparently, while food stuffs is in profit
• 0:14
  Speaker 1: more than international supermarkets like wal martin Tesco. Ernie Newman
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  Speaker 1: is a grocery policy expert on the program this morning. Hey, Ernie,
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  Speaker 1: good to have you on the show. Now, is this
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  Speaker 1: The number that struck me was three percent? So we're
• 0:28
  Speaker 1: paying on average three percent more than the OECD average
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  Speaker 1: for our food. Is that bad?
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  Speaker 2: Oh? It is for a country like this, which is
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  Speaker 2: an extremely efficient food producer, we shall be paying way
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  Speaker 2: way below the OECD average, and you know years ago
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  Speaker 2: we did. The problem is that far too much.
• 0:52
  Speaker 1: The thing is we we're an export nation, right, we
• 0:55
  Speaker 1: export most of what we produce, which is subject to
• 0:58
  Speaker 1: an international price.
• 1:01
  Speaker 2: I wouldn't say most. Well, yeah, in certain markets we do, yes,
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  Speaker 2: and the dairy and horticulture industries that's true. But there's
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  Speaker 2: a huge amount of local produce where the problem here
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  Speaker 2: is excessive markups. So that there are problems with the
• 1:16
  Speaker 2: excessive profitability of the retail sector. And I guess there
• 1:19
  Speaker 2: are also problems with distribution because you know, we all
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  Speaker 2: feel good when volunteer is doing well, but that's not
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  Speaker 2: being passed through the community. That's all going to the
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  Speaker 2: farmers and not being passed through the consumers. And that's
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  Speaker 2: why it's creating an increasing and a huge imbalance between
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  Speaker 2: the rich and poor.
• 1:37
  Speaker 1: But the farmers have invested their time, energy and money
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  Speaker 1: into a business and this is this is their reward.
• 1:45
  Speaker 1: And they're not always making money, are they. I mean,
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  Speaker 1: sure times are good now, but they're not always that way.
• 1:50
  Speaker 2: Well, that's true, and I mean you can get into
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  Speaker 2: the whole argument about the Fontira thing. You know, when
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  Speaker 2: there's bad weather and drought conditions and biosecurity issues and whatever,
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  Speaker 2: we all dip into our pockets and we all pay
• 2:02
  Speaker 2: to help the farmers out on that. And maybe it's
• 2:06
  Speaker 2: a bit of a time for a quid pro pong
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  Speaker 2: where New Zealanders could pay but less for our butter
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  Speaker 2: and cheese to make up for that.
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  Speaker 1: Largest you're talking about a corporate basically sponsoring the New
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  Speaker 1: Zealand public.
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  Speaker 2: I know I'm talking I'm talking about it a government.
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  Speaker 1: Here, because government subsidizing products.
• 2:24
  Speaker 2: Well, no, not subsidizing not subsidizing at all. But there
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  Speaker 2: needs to be a payback to the whole community when
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  Speaker 2: the farmers are doing well, just as there is I
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  Speaker 2: guess a degree of corporate largest from the community to
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  Speaker 2: the farmers.
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  Speaker 1: There is ernie. There is when the farmers do well,
• 2:43
  Speaker 1: they pay more tax. When they pay more tax, we
• 2:45
  Speaker 1: have better hospitals.
• 2:49
  Speaker 2: That at the moment you're seeing that at the moment earning.
• 2:51
  Speaker 1: My problem is that if we are only three percent
• 2:54
  Speaker 1: more expensive than the OECD average, and we haven't taken
• 2:58
  Speaker 1: into account the fact that we've got GST at fifteen
• 3:01
  Speaker 1: percent on everything, are we are things really that bad here?
• 3:06
  Speaker 2: Well? I think they are, And with respect, I think
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  Speaker 2: you've been listening to too many supermarket lobbyists on this.
• 3:11
  Speaker 2: You know, the fact is we are of food producing country.
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  Speaker 2: We should be one of the most economic places in
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  Speaker 2: which to buy food in the world, and we used
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  Speaker 2: to be. And if you look at the Communist Commission figures,
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  Speaker 2: the increase in our food prices over the last five
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  Speaker 2: or ten years has been way way way ahead of
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  Speaker 2: general inflation. Now there's something wrong when we're paying the
• 3:36
  Speaker 2: kind of prices that we are for basic food stuff,
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  Speaker 2: for fruit and vegetables for milk and cheese and so on.
• 3:42
  Speaker 2: You know, we should be the best place of the
• 3:44
  Speaker 2: world in which to live for products of that kind.
• 3:47
  Speaker 1: Yeah, we also import a bunch of stuff that we
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  Speaker 1: buy at the supermarket, right, and the chipping costs have
• 3:53
  Speaker 1: gone up. There's a whole bunch of reasons why things
• 3:55
  Speaker 1: have gone up in price, especially for a country like
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  Speaker 1: New Zealand at the bottom end of the world.
• 4:01
  Speaker 2: No, the bottom end of the world argument doesn't really
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  Speaker 2: stack up this. There are certain products that are imported.
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  Speaker 2: But when you when you look along with supermarket shelves,
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  Speaker 2: the things that we're buying every day. You know, our bread,
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  Speaker 2: our dairy products, our produce, our vegetables, you know a
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  Speaker 2: lot of dry grocery lines, ice cream. All of those
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  Speaker 2: things generally are made made locally or in Australia where
• 4:23
  Speaker 2: the shipping costs are not necessarily that great, so that
• 4:26
  Speaker 2: those arguments don't stack up. The issue. The issue here
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  Speaker 2: is the inflation over the last few years.
• 4:32
  Speaker 1: It's been bloody, terrible hurts every day. Ernie, appreciate you
• 4:35
  Speaker 1: coming on the show this morning. Ernie Newman, who's the
• 4:38
  Speaker 1: grocery policy expert, on the latest Grocery Report.
• 4:42
  Speaker 2: For more from Early Edition with Ryan Bridge, listen live
• 4:45
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• 4:48
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