David takes on the supermarket Goliaths

Dunedin's very own David, Commerce Minister Dr David Clark, does not much look like the fighting type.

However, right now he is taking on the Goliaths that are the major supermarket chains and he has come out swinging, surprising them, the Opposition and quite possibly himself as well in the process.

The genesis of this stoush dates back to November 2020 when Dr Clark, as the freshly minted minister of commerce, fulfilled a Labour election manifesto commitment to conduct a market study of the supermarket sector.

At this point the two big players in the sector, Foodstuffs and Woolworths, were probably not overly concerned.

The only previous market study conducted by competition watchdog the Commerce Commission had been in to the fuel industry, and despite the Government claiming it has had a real effect on prices, motorists contemplating the enormous price of fuel probably do not feel anything has changed at all.

When the Commerce Commission’s draft findings were released in July, there was probably not too much in them to alarm the big players: a bland statement that there were "problems" in the market and that there should be increased competition in the grocery sector looked easy enough to shrug off.

However, they were in for a bit of a surprise, as were officials, a couple of months ago when Dr Clark opted to reject two of the study’s main findings on the grounds that they did not go far enough, fast enough.

One thing which aids the supermarket chains in maintaining their duopoly is that they control both the retail and wholesale sides of the business.

Rather than accepting the commission’s proposed three-year deadline to address that, Dr Clark instead told the chains to act now, and has spent the past few weeks repeatedly telling the public that he has told them so.

Dr Clark also demanded action on freeing up suitable land, much of it bought and banked by supermarkets, where potential competitors could have set up shop, if only they could.

The Commerce (Grocery Sector Covenants) Amendment Bill, legislation intended to tackle just that, was introduced under urgency on Budget day, and after the recess its next stages will be high up on the order paper.

Dr Clark also ordered the commission to review progress on implementing its recommendations annually — it had, again, suggested within three years,

Dr Clark has also been repeatedly dropping the "R" bomb — regulation — and warning supermarkets that if nothing changes he will change the rules to make sure it happens.

He did so again on Wednesday, taking a general debate slot to take yet another swing at supermarket proprietors.

"We put supermarkets on notice and the message is clear: change at pace to increase competition and be prepared for regulation."

Labour putting the foot on the gas on grocery sector reform has taken the Opposition by surprise, and put it in a tricky position.

Having bludgeoned Labour for a year or so on the "cost of living crisis", fighting against something designed to make feeding the family cheaper is a difficult thing to do.

Also, the parties most in favour of deregulation would hardly like to admit that the invisible hand of the market might just be doing the fingers to consumers.

Potentially feeling a bit nervous at this point as well are the hardware store chains.

The Commerce Commission is in the process of finishing its third market study, into the price of building supplies, and given Dr Clark’s unexpected vigour in recent weeks they might now be rushing to get ready for a report they might have expected to be able to readily dismiss with a few well-chosen talking points.

That said, Dr Clark is entitled to have a few nerves jangling at the moment too.

His first attempt at being a Cabinet minister did not end well, and he has a second chance few are afforded in politics.

He is talking a mean game, and also appears to be walking one.

Nothing has been achieved yet, but if the cost of groceries does indeed come down, and a new chain or two do actually open up on our shores, Dr Clark will have a genuine achievement to point to.

Should he succeed, he will also earn the grateful thanks of the prime minister and minister of finance.

The total value of the cost of living adjustment they unveiled in last month’s Budget would be quickly swallowed up by the average weekend grocery spend, and when it comes time to campaign next year they would dearly like to be able to say that not only did Labour help at a time of immediate need, that in the longer term it was the party that made food cheaper.

So near, so far

As predicted last week, Southland National MP Joseph Mooney’s Te Ture Whenua Maori Bill was indeed voted down by the Government at first reading.

However, it almost inadvertently got the thumbs-up from Labour Te Tai Tonga MP Rino Tirikatene.

" I commend this — I don’t commend this Bill, sorry," he said, catching himself in the nick of time.

"Oh, rewind — rewind. We oppose this Bill. Aroha mai."

With friends like these

Wednesday was a busy night for Mr Tirikatene, who was also steering his local Bill, the Canterbury Regional Council (Ngai Tahu Representation) Bill through second reading ... and offering some unusual thank-yous in the process.

"I want to acknowledge the National Government under Sir John Key and Bill English for, I guess, putting the circumstances in place whereby Ngai Tahu representatives on the council were able to come into being."

That would be because that government fired the regional council and installed commissioners, who included in their ranks iwi representative Donald Couch.

Anything could happen

In a "no-one could have predicted that" moment, Ms Ardern and newly elected Australian PM Anthony Albanese met yesterday and swapped a few gifts ... in this case a few LPs apiece.

Ms Ardern got records by Spiderbait, Powderfinger and Midnight Oil, the four records Mr Albanese received included classic Dunedin sound disc Boodle, Boodle, Boodle by The Clean.

mike.houlahan@odt.co.nz