Mandatory unit pricing for grocery products

Background

The Commerce Commission has completed a market study looking at how to improve competition in New Zealand’s retail grocery sector. The Commission has made several recommendations for improving competition in the sector, including mandating the consistent display of unit pricing for grocery retail products.

The discussion paper therefore seeks feedback on how mandatory unit pricing should be designed and implemented.

What is unit pricing?

Unit pricing is the price per unit of measure for a product, such as the cost per kilogram or litre. Unit prices are usually displayed as a price per standard unit of measurement, together with the retail price of the product. For example, where a 1.5kg bag of flour is sold for $3.00, the unit price displayed would be $2.00 per kg. 

Unit pricing can help consumers more easily compare between the prices of different products, especially where products are sold in different sized packaging and by different brands. Even when not directly comparing products and retailers, clear and accurate unit pricing information can help consumers develop perceptions of value over time which in turn can help them decide where to shop to best meet their needs. 

What this consultation is seeking feedback on

This discussion paper seeks feedback on:

• the potential benefits and compliance costs of mandatory unit pricing
• who mandatory unit pricing should apply to
• where mandatory unit pricing should apply
• what units of measurement should be used
• what, if any, products should be exempt
• how unit pricing should be displayed