Latest news with #PierrevanHeerden
1News
02-07-2025
- Business
- 1News
Foodstuffs North Island warned for 'likely' breach of supply code
Foodstuffs North Island has been issued a warning for treatment of a supplier that likely breached the Grocery Industry Competition Act 2023. The Commerce Commission said it believed Foodstuffs North Island "likely breached a fundamental aspect of the Supply Code which is that retailers deal with suppliers in good faith at all times". The company responded to the commission's warning by stating it took its obligations to suppliers seriously and was committed to keeping fair and constructive relationships. New Zealand's mandatory Grocery Supply Code was introduced under the Grocery Industry Competition Act, created to increase transparency and certainty for suppliers through a set of rules supermarkets need to follow when dealing with suppliers. "Foodstuffs North Island appears to have obstructed and delayed a supplier request by acting in ways that we believe were uncooperative and unreasonable," said Grocery Commissioner Pierre van Heerden. ADVERTISEMENT He was "concerned" this followed a pattern of behaviour that has been present in the industry for decades. "This behaviour has been enabled for so long, due to the significant power imbalance between the major supermarkets — who hold the vast majority of the market — and suppliers, who have limited bargaining power in comparison," he said. A category manager at Foodstuffs North Island — who acted as the main point of contact for the supplier — also came under investigation regarding their role in the matter. "Suppliers are reliant on their relationships with the retailers' commercial teams, so the staff in these roles within the supermarkets hold a lot of power. Any behaviour that weaponises this power imbalance is unacceptable," van Heerden said. "The major supermarkets have a responsibility to make sure their staff are properly trained. They need to make sure their staff follow the rules and deal with suppliers in good faith. "The changes we're proposing to the Supply Code are intended to provide more scrutiny to these relationships and clarity about what is acceptable behaviour." The morning's headlines in 90 seconds, including Australia's weather bomb, the surprising costs of getting one more dog, and BTS are back. (Source: 1News) ADVERTISEMENT Van Heerden said the Commerce Commission had surveyed suppliers and was concerned with the responses. "Our supplier survey showed that 37% of suppliers reported their interactions with Foodstuffs North Island as negative or very negative. This is significantly higher than suppliers' ratings for Woolworths and Foodstuffs South Island, at approximately 20%." Van Heeden said the Commission was "focused on addressing this power imbalance and improving things for suppliers". "We really appreciate where suppliers have come forward to tell us about issues so we can take action – like in this case where we heard directly from the supplier involved." Foodstuffs North Island response A Foodstuffs North Island spokesperson told 1News the company took Grocery Supply Code obligations seriously, and was committed to "maintaining fair and constructive relationships with our suppliers". "Since the introduction of the code, we've implemented a comprehensive programme of training and support for our team, including dedicated intranet resources, regular drop-in sessions for commercial staff, and mandatory training modules. ADVERTISEMENT "We'll continue to work with the commission to ensure our people understand and uphold the standards expected," the spokesperson said.
Scoop
01-07-2025
- Business
- Scoop
Foodstuffs North Island Warned For Likely Breaking Grocery Competition Law
The Commerce Commission has issued a warning to Foodstuffs North Island (FSNI) for their treatment of a supplier that likely breached the Grocery Industry Competition Act 2023. 'We believe that Foodstuffs North Island likely breached a fundamental aspect of the Supply Code which is that retailers deal with suppliers in good faith at all times,' Grocery Commissioner Pierre van Heerden says. "I'm concerned that this follows a pattern of behaviour that has been present in the industry for decades. 'This behaviour has been enabled for so long due to the significant power imbalance between the major supermarkets, who hold the vast majority of the market, and suppliers, who have limited bargaining power in comparison. 'Foodstuffs North Island appears to have obstructed and delayed a supplier request by acting in ways that we believe were uncooperative and unreasonable. 'In this instance, based on the evidence we have, we decided a warning was the right response. However, if more examples come to light, we will not hesitate to take further action,' Mr van Heerden says. The Category Manager at FSNI, who acted as the main point of contact for the supplier, also came under investigation regarding their role in this matter. 'Suppliers are reliant on their relationships with the retailers' commercial teams, so the staff in these roles within the supermarkets hold a lot of power. Any behaviour that weaponises this power imbalance is unacceptable,' Mr van Heerden says. 'The major supermarkets have a responsibility to make sure their staff are properly trained. They need to make sure their staff follow the rules and deal with suppliers in good faith. 'The changes we're proposing to the Supply Code are intended to provide more scrutiny to these relationships and clarity about what is acceptable behaviour. 'Our supplier survey showed that 37% of suppliers reported their interactions with Foodstuffs North Island as negative or very negative. This is significantly higher than suppliers' ratings for Woolworths and Foodstuffs South Island, at approximately 20%. 'We're focused on addressing this power imbalance and improving things for suppliers. We really appreciate where suppliers have come forward to tell us about issues so we can take action – like in this case where we heard directly from the supplier involved,' Mr van Heerden says. Only a Court can determine if there has been a breach of the Act. Background The warning letter can be found on the Commission's website. New Zealand's mandatory Grocery Supply Code was introduced under the Grocery Industry Competition Act. The Code was created to increase transparency and certainty for suppliers through a set of rules supermarkets need to follow when dealing with suppliers. Bringing increased certainty to agreements between supermarkets and suppliers would give suppliers more confidence to innovate and invest in more choice for consumers. The maximum penalty for breaches of the Supply Code for an individual is $200,000, or in any other case the greater of $3 million, and the value of any commercial gain; or if that can't be ascertained 3% of the company turnover.
Otago Daily Times
08-06-2025
- Business
- Otago Daily Times
Slow supermarket competition progress
Reading reports of Grocery Commissioner Pierre van Heerden's concerns last week about the supermarket giants was like hearing the message there is an unexpected item in the bagging area at the self-checkout. Frustrating noise which is all too familiar. Shoppers would have lost track of how many years it is since they read/heard about the unfair tactics employed by the giant supermarkets when dealing with suppliers, the difficulty of small players such as dairies getting access to wholesale goods at reasonable prices, and the question of whether special prices are really what they seem. Those still struggling to pay at the checkout could be forgiven for asking if much has changed since the final report on the market study of the grocery sector from the Commerce Commission more than three years ago. Whatever has occurred in the aftermath of that has not had the trickle-down effect of reducing shoppers' weekly spending or doing enough to alter the behaviour of the three big players, Woolworths, Foodstuffs North Island, and Foodstuffs South Island. Last year the grocery commissioner was scathing about the lack of progress towards improving competition and, as well as a review of the Grocery Supply Code, which was introduced in September 2023, he decided to take another look at the wholesaling behaviour of the giant companies. Mr van Heerden has reported back on both questions. In his draft review of the code, he proposes strengthening it to stop retailers insisting smaller suppliers take on costs and risks best managed by the retailers themselves. This would include not allowing retailers to charge suppliers for stocking shelves or for goods that deteriorate and become unfit for sale while in the supermarkets' control. The commissioner is worried the power imbalance between the two groups "creates a reluctance among suppliers to push back on supermarket demands or behaviour for fear of damaging relationships or losing access to supermarket shelves". Among his proposed changes is prohibiting retailers from retaliating against suppliers who exercise their rights under the code. The type of behaviour he is still grappling with should have been sorted out long before now. Suppliers have been complaining about bullying take-it-or-leave-it deals for years. On the wholesaling question, one of the changes Mr van Heerden wants is for the major supermarkets to expand their wholesale product range and pass promotional funding through to their wholesale customers so other retailers can access lower prices. Again, this is a problem flagged years ago, and we wonder why he is allowing the big three another 12 months to voluntarily sort it out before he moves to seek regulatory change. This year, there has also been much enthusiasm from Economic Growth Minister Nicola Willis about attracting a new major player to provide much-needed competition and ultimately force prices down for shoppers. But it is still difficult not to be sceptical about the chance of her efforts succeeding without some direct intervention by the government which might include such measures as carving off existing brands owned by the giants into separate businesses, splitting wholesale and retail provision of groceries, or other divestment options. If her party was of a mind to head down any sort of interventionist path it would likely have the support of coalition partner New Zealand First, which has railed against the supermarket giants' stranglehold. In its coalition agreement it requires the government to "explore options to strengthen the powers of the Grocery Commissioner, to improve competitiveness, and to address the lack of a third entrant to remove the market power of a duopoly". However, newly minted deputy prime minister and leader of Act New Zealand David Seymour, who voted against the introduction of a grocery commissioner, would be more difficult to persuade. His previously expressed view is that the way to increase competition is to cut back "thickets of regulation" dissuading new entrants, whether in overseas investment, resource management or labour laws. In such a political climate, the sort of change which could push prices down and mean something to the hapless shopper still seems millions of barcode scans away.
NZ Herald
06-06-2025
- Business
- NZ Herald
Time to take action over supermarket competition
The Commerce Commission completed its market study on the grocery sector in March 2022. THREE FACTS The Commerce Commission took another incremental step towards cracking down on the supermarket sector this week with its proposal to tighten up the Grocery Supply Code. Grocery Commissioner Pierre van Heerden is worried about the power imbalance between the major supermarket chains and suppliers.
Yahoo
05-06-2025
- Business
- Yahoo
NZ watchdog mulls tightening grocery rules to create fairer playing field
New Zealand's competition regulator is proposing measures to create a fairer playing field between emerging grocery producers and the major supermarkets. In a two-pronged initiative, the Commerce Commission is also concerned that smaller grocery retailers face a disadvantage over their more dominant counterparts when it comes to securing competitive prices from large suppliers. The Commission presented its findings today (5 June) following a review of the Grocery Supply Code and is reaching out for feedback before it publishes its final report in September. "If the Commission doesn't see meaningful progress in 12 months, it will decide if regulations should be changed," the regulator said in a statement. Grocery Commissioner Pierre van Heerden explained: "We know the current grocery market is not serving Kiwi consumers well. The status quo lets a few major players set the rules for the rest of the industry which is negatively impacting consumers, new and expanding competitors, and small suppliers." He added: "These major players are the three main supermarkets and large national and multi-national suppliers. Their significant market share allows them to influence the settings of the market. This limits the ability for competing retailers to enter and grow in the market and often results in smaller suppliers getting an unfair deal." The draft recommendations to the Supply Code include curbing the circumstances in which supermarkets can bill suppliers for routine retail tasks, such as shelf stocking and display arrangement. Van Heerden highlighted the issue of a power disparity, saying that a "power imbalance between the major supermarkets and small suppliers creates a reluctance among suppliers to push back on supermarket demands or behaviour for fear of damaging relationships or losing access to supermarket shelves". New Zealand's grocery market is dominated by Foodstuffs and Woolworths. "The major supermarkets are the largest customers for most grocery suppliers," van Heerden said, controlling 82% of the market. The proposed modifications by the Commission would mandate supermarkets to keep records on how they are complying with the Code when undertaking "certain activities", including "negotiating promotions with suppliers and making deductions to payments without written consent". Looking into the wholesale supply of groceries, the Commission pointed out that promotional payments and rebates are generally inaccessible to newer or smaller retailers. 'A significant issue new and expanding supermarket competitors face is securing access to cost-effective groceries from large suppliers," Van Heerden said. "Competing retailers can't negotiate similar levels of support due to their weaker buying power." He also noted that the prevalent high-low pricing strategy used by New Zealand's major supermarkets is more extreme than in other countries, and a reduction in promotional dependence would result in more consistent and lower prices for consumers. 'The best option is for large suppliers and the major supermarkets to voluntarily change their behaviour. If they don't, we'll have to consider our other alternatives,' van Heerden said. "NZ watchdog mulls tightening grocery rules to create fairer playing field" was originally created and published by Just Food, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
