Nicola Willis is encouraged Commerce Commission has taken Foodstuffs North Island to court
Photo:
RNZ/Mark Papalii
Finance and Economic Growth Minister Nicola Willis is encouraged the Commerce Commission has taken a case against grocery giants for
alleged cartel behaviour
.
The commission is taking Foodstuffs North Island and its subsidiary Gilmours Wholesale to court over what it believes is cartel conduct.
The regulator said it would shortly file civil proceedings against the big grocery suppliers under the Commerce Act and Grocery Industry Competition Act (GICA).
It said the parties set up a supply agreement with a hospitality customer that effectively blocked competition by another supplier.
Willis said the case was for the courts to determine, as pre-judging the matter would be mixing her role as minister responsible for grocery regulation.
But she said it was important the commission uses its prosecution powers when evidence is brought to it.
"I hope that this does send a signal to those who feel like they have been mistreated that where appropriate the Commerce Commission is prepared to take serious action," she said.
Willis said New Zealand had laws against cartel-like behaviour for good reason.
"New Zealand consumers ultimately end up paying the price for misconduct. Cartels are not allowed in New Zealand," she said.
"They can be very hard to prove. In this case, what is encouraging is that affected parties have come forward, have provided that information to the commission, with the confidence it'll be taken seriously, and the Commerce Commission has progressed to a prosecution."
Prime Minister Christopher Luxon said it was "fantastic" an investigation was underway.
"We don't want to see that in New Zealand, I'm proud they're doing that work. It's exactly the issue that we're raising, we want competition in the supermarket sector, there's no excuses for any of that behaviour whatsoever."
Prime Minister Christopher Luxon said it was "fantastic" an investigation was underway.
Photo:
RNZ / Samuel Rillstone
Labour leader Chris Hipkins called the allegations "really concerning" and said it showed why more competition was needed in the grocery sector.
"I think it's well and truly time we saw more competition in that sector. I'm open to any conversations about how we get more competition in that area."
The government has promised to reveal the next steps to improve supermarket competition, as part of its latest quarterly action plan.
ACT leader David Seymour, while unable to comment on the substance of the commission's case as it was before the courts, also pointed to the lack of competition in the sector.
"Until we address the competition problem we won't see lower prices, no matter how many different commissioners there are watching over the sector," he said.
Over the weekend, ACT
announced a policy
to introduce a fast-track approval process for new entrants or smaller grocers, streamlining rezoning, consenting, and investment approvals.
Commerce Commission chair John Small said the commission took allegations of cartel conduct seriously.
"Cartel conduct harms consumers through higher prices or reduced quality, and it harms other businesses that are trying to compete fairly," Small said.
"In this instance, the supplier wanted to provide a competitive supply channel, but this was stopped by the agreement with FSNI and Gilmours.
"We do not tolerate this kind of behaviour and will not hesitate to take court action, where appropriate."
In a statement, Foodstuffs North Island denied wrongdoing.
"Foodstuffs North Island and our stores are committed to complying with all our regulatory obligations, and we co-operated fully with the Commerce Commission throughout their investigation of this matter," a spokesperson said.
"We strongly deny any unlawful conduct.
"As this matter will be before the court in due course, it would not be appropriate to comment further at this time."
Additional reporting by RNZ Business
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