Supermarket competition observatory to be set up
A new supermarket watchdog is being appointed as part of the government’s latest push to crack down on the grocery sector duopoly.
Trade and Consumer Affairs Minister David Clark said the grocery commissioner would be created to “empower the sector and increase competition”.
They will provide annual reviews of the state of competition.
“The Grocery Commissioner will be an industry arbiter, keeping the supermarket duopoly honest and speaking out where he suspects there is a problem,” Clark said.
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The role is expected to be established later this year.
It also released for consultation a mandatory code of conduct between major food retailers to “ensure suppliers get a fair deal”.
“Historically, there has been an imbalance in the bargaining power of large food retailers over their suppliers.
“The grocery code of conduct will solve this problem by preventing major retailers from using their power to pass the costs and risks on to these suppliers. He will ensure that this relationship is conducted fairly.”
READ MORE: Supermarket competition ‘doesn’t work well for consumers’
In May, it was announced that supermarkets would be forced to allow rival retailers access to groceries on reasonable terms.
They would be checked every year to check that there is enough competition, as part of the government’s plan to crack down on the supermarket duopoly.
A Commerce Commission review of the industry found that competition was not working well for consumers.