The Commerce Commission released its third “Annual Grocery Report” this week. The headline finding is a single number: the duopoly’s share of the retail grocery market is 82%. That is precisely where the 2022 market study found it, and precisely where it has sat for five years. So, nothing has really changed to what is a “broken market”.
The Commission’s own head of grocery, Alice Hume, called the state of the sector “disappointing”. Both Foodstuffs entities, the Commission found, “continue to sit at the top end of international profitability benchmarks”. Food prices rose again, by 4.6% in the year to December. The Commission’s verdict on its own regulatory regime was that the market shows “little observable change in core competition metrics”.
This is the third report in a row to say roughly the same thing, to roughly the same shrug. The interesting question is no longer what is broken; we have known that since Shane Jones first raised it in 2014, and in forensic detail since 2021. The interesting question is why, with the cost of living the defining issue of an election year, almost nobody in Parliament will fix it.
A reality check before the campaign
Consider what the years of effort have actually produced. There has been a full market study, a new Act, a Grocery Commissioner, a wholesale access regime, a ban on land covenants, and a worldwide hunt for a new entrant that approached 21 possible companies. The market is as concentrated today as it was the day all that work began.
Grocery Commissioner Pierre van Heerden says the reforms “need more time to bed in”. It is the kind of reassurance that is only ever offered when nothing is about to happen.
Unfortunately the politicians have now been talking about doing something to fix the supermarket sector for over a decade, but the supermarkets don’t really have anything to fear.
Where is the left?
On paper, this is the left’s issue, because historically they have existed as a check corporate power. The supermarket ripoff is the most overt expression of the cost-of-living crisis there is, and all supermarket customers surely suspect they are being fleeced. This is a ready-made campaign for any party claiming to stand for ordinary people against the big end of town.
But the political left doesn’t seem to be willing to touch this issue. Labour’s entire contribution to this week’s report was its spokesperson Arena Williams describing it as “frustrating reading”. That is a reaction, not a policy. There is no Labour plan to break up the duopoly, and no sign one is coming.
And Labour has no answer to the obvious questions. What is its position on structural separation? Does it back the abolition of the Grocery Commissioner, or lobbying reform — which McLauchlan’s investigation shows is inseparable from the grocery question? On none of it has the party said a word.
The Greens, also, who might be expected to own an issue blending inequality and corporate concentration, have said next to nothing.
Into that vacuum have stepped the populists. New Zealand First is campaigning on a breakup from the right. The Opportunity Party, polling at 6% according to the Roy Morgan poll this week, is harvesting the same frustration from the left.
As Heather du Plessis-Allan put it yesterday, both are now the “blow it up” parties for voters who find Labour never brave enough and the Greens too weird. The most redistributive issue of the decade, and the traditional parties of redistribution are nowhere to be found.
The party that cannot lead it
Why can’t Labour pick this up? The answer is structural rather than merely lazy.
Labour cannot credibly lead a campaign against the supermarket lobby because Labour is also captured by its relations with the actual supermarket lobbyists.
The revolving door here is well documented. In a Listener investigation last week, Danyl McLauchlan set it out, describing Woolworths’ head of government relations, Andrew Kirton, as “Labour Party royalty”.
Kirton’s career trajectory, as described by McLauchlan, is worth quoting in full: “He was a communications adviser to Helen Clark, later became general secretary of the party, then served as campaign manager for the 2017 election that brought the Ardern government to power. When Chris Hipkins took over as prime minister in 2023, he installed Kirton as his chief of staff – one of the most powerful unelected political positions in the country. Kirton’s wife Camilla Belich is Labour’s justice spokesperson. Just before running the PM’s office, Kirton was a lobbyist for Anacta, the Australian government relations firm engaged by Woolworths.”
McLauchlan points out that the person who held that Woolworths role before Kirton, Ellen Read, was Jacinda Ardern’s deputy chief press secretary. During the market study, Woolworths retained Capital Government Relations, whose owner Neale Jones had been chief of staff to both Andrew Little and Ardern, and which employed Mike Jaspers, a former Ardern adviser, to survey MPs on the company’s behalf. In January 2022, just before the study’s final report, Kirton arranged a dinner between finance minister Grant Robertson and Countdown’s managing director.
A party that has placed this many of its own people on the duopoly’s payroll is in no position to declare war on it. This is not a smoking gun of present corruption; these are people who worked for Labour and now work for Woolworths. But the friendships and the future job prospects all run one way. That is why the obvious champion of the checkout shopper is sitting this one out.
And McLauchlan points out that it’s not just Labour people involved: “Former National cabinet minister Steven Joyce sits on the board of directors for Foodstuffs North Island.”
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