Government seeks new supermarket competitor and reviews market structure.
The New Zealand Government has outlined plans to improve grocery competition, citing high prices as a major concern for Kiwis. A Request for Information (RFI) process will be initiated to identify regulatory and legislative steps needed to support a national-scale competitive challenge to the supermarket duopoly.
A new grocery competitor is seen as essential to bring down prices and increase options for consumers. The Commerce Commission's first grocery report supports this view, stating that success in the industry requires a third major network of supermarkets offering full-range groceries nationwide.
The RFI will seek input from potential entrants, including established overseas firms such as Coles, Aldi, and Lidi, as well as existing players and smaller store owners. The Government aims to identify the conditions needed for new competitors to enter and grow in the market, including addressing barriers like securing suitable store sites and accessing supply.
If necessary, further intervention options may be considered, including legislation and structural separation of existing entities. Specialist external advice has been commissioned to explore ways to restructure the supermarket duopoly and improve competition.
The RFI will proceed at pace with information sought over the next six weeks. Work on market structure options will continue alongside the Commerce Commission's ongoing work. Further recommendations are expected in mid-2025, following which legislation may be introduced if deemed necessary.