Market study into supermarkets

On 17 November 2020, the Government announced that it would conduct a 12 month market study into supermarkets.

The study will allow the Commerce Commission to investigate any factors that may affect competition for the supply or acquisition of groceries by retailers in New Zealand.

This topic was chosen as the candidate of the study because of public concerns about a high level of concentration in the market for groceries. In addition, research conducted by the Productivity Hub indicates that competition levels in the sector have weakened over time.

Competition in New Zealand: highlights from the latest data [PDF 1.7MB](external link) - New Zealand Productivity Commission

The Government has also heard that unequal bargaining power between supermarkets and suppliers pushes prices unreasonably low for suppliers, which could impede investment in innovation and quality. While low prices benefit consumers, it is unclear how much of this is being passed onto consumers, with the cost of food making up 17 percent of household weekly expenses.

The study will also make inquiries into the supplier side of the grocery market. This means that if competition problems are found, small business suppliers are likely to benefit from any recommendations.

The Commerce Commission will publish a draft report in mid-2021 for public feedback, and a final report by 23 November 2021.

Further information

Find out more about the second market study:

Notice for a Competition Study into the Retail Grocery Sector(external link)

Last updated: 17 November 2020