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Budget 2022: “This is a clear signal of how seriously we’re taking the grocery issue” – Clark

20th May 2022 By Paul Yandall | | @foodtickernz

The government has started its reform of the grocery sector by introducing urgent Budget night legislation to stop major supermarkets blocking competitors from accessing land for new stores.

The Commerce (Grocery Sector Covenants) Amendment Bill amends the Commerce Act 1986, banning restrictive covenants on land, and exclusive covenants on leases.

It also makes existing covenants unenforceable.

David Clark

“This legislation is a clear signal of how seriously the government is taking this issue,” said Minister of Commerce and Consumer Affairs David Clark before the legislation was introduced on Thursday evening.

“We’re tackling a root cause of the problem that prevents an even playing field for new competitors to enter the market.”

Clark added it was “just the first part” of the government’s response to the Commerce Commission’s retail grocery sector market study, which found competition was not working well in the $22bn sector controlled by a Foodstuffs and Woolworths New Zealand duopoly.

“I expect to release information about further steps the government is taking to improve competition shortly,” he said.

The new legislation aims to stop supermarkets from engaging in what Clark described as anti-competitive land wars, where Foodstuffs and Woolworths buy up land or dictate the terms of leases to block their competitors from getting a foothold in the area.

The practice leaves customers without choice and often sees suburbs and shopping centres stuck with only one supermarket option.

Clark said an example of this was in Ponsonby, Auckland, which is primarily serviced by only one supermarket provider.



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