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Speaker 1: The Commerce Commission's latest grocery reports out, and not much

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Speaker 1: has changed, big two supermarket chains dominating still eighty two

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Speaker 1: percent market share. We're paying the fifth highest price in

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Speaker 1: the developed world, apparently, while food stuffs is in profit

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Speaker 1: more than international supermarkets like wal martin Tesco. Ernie Newman

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Speaker 1: is a grocery policy expert on the program this morning. Hey, Ernie,

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Speaker 1: good to have you on the show. Now, is this

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Speaker 1: The number that struck me was three percent? So we're

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Speaker 1: paying on average three percent more than the OECD average

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Speaker 1: for our food. Is that bad?

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Speaker 2: Oh? It is for a country like this, which is

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Speaker 2: an extremely efficient food producer, we shall be paying way

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Speaker 2: way below the OECD average, and you know years ago

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Speaker 2: we did. The problem is that far too much.

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Speaker 1: The thing is we we're an export nation, right, we

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Speaker 1: export most of what we produce, which is subject to

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Speaker 1: an international price.

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Speaker 2: I wouldn't say most. Well, yeah, in certain markets we do, yes,

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Speaker 2: and the dairy and horticulture industries that's true. But there's

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Speaker 2: a huge amount of local produce where the problem here

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Speaker 2: is excessive markups. So that there are problems with the

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Speaker 2: excessive profitability of the retail sector. And I guess there

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Speaker 2: are also problems with distribution because you know, we all

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Speaker 2: feel good when volunteer is doing well, but that's not

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Speaker 2: being passed through the community. That's all going to the

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Speaker 2: farmers and not being passed through the consumers. And that's

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Speaker 2: why it's creating an increasing and a huge imbalance between

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Speaker 2: the rich and poor.

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Speaker 1: But the farmers have invested their time, energy and money

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Speaker 1: into a business and this is this is their reward.

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Speaker 1: And they're not always making money, are they. I mean,

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Speaker 1: sure times are good now, but they're not always that way.

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Speaker 2: Well, that's true, and I mean you can get into

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Speaker 2: the whole argument about the Fontira thing. You know, when

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Speaker 2: there's bad weather and drought conditions and biosecurity issues and whatever,

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Speaker 2: we all dip into our pockets and we all pay

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Speaker 2: to help the farmers out on that. And maybe it's

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Speaker 2: a bit of a time for a quid pro pong

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Speaker 2: where New Zealanders could pay but less for our butter

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Speaker 2: and cheese to make up for that.

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Speaker 1: Largest you're talking about a corporate basically sponsoring the New

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Speaker 1: Zealand public.

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Speaker 2: I know I'm talking I'm talking about it a government.

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Speaker 1: Here, because government subsidizing products.

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Speaker 2: Well, no, not subsidizing not subsidizing at all. But there

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Speaker 2: needs to be a payback to the whole community when

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Speaker 2: the farmers are doing well, just as there is I

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Speaker 2: guess a degree of corporate largest from the community to

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Speaker 2: the farmers.

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Speaker 1: There is ernie. There is when the farmers do well,

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Speaker 1: they pay more tax. When they pay more tax, we

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Speaker 1: have better hospitals.

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Speaker 2: That at the moment you're seeing that at the moment earning.

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Speaker 1: My problem is that if we are only three percent

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Speaker 1: more expensive than the OECD average, and we haven't taken

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Speaker 1: into account the fact that we've got GST at fifteen

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Speaker 1: percent on everything, are we are things really that bad here?

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Speaker 2: Well? I think they are, And with respect, I think

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Speaker 2: you've been listening to too many supermarket lobbyists on this.

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Speaker 2: You know, the fact is we are of food producing country.

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Speaker 2: We should be one of the most economic places in

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Speaker 2: which to buy food in the world, and we used

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Speaker 2: to be. And if you look at the Communist Commission figures,

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Speaker 2: the increase in our food prices over the last five

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Speaker 2: or ten years has been way way way ahead of

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Speaker 2: general inflation. Now there's something wrong when we're paying the

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Speaker 2: kind of prices that we are for basic food stuff,

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Speaker 2: for fruit and vegetables for milk and cheese and so on.

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Speaker 2: You know, we should be the best place of the

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Speaker 2: world in which to live for products of that kind.

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Speaker 1: Yeah, we also import a bunch of stuff that we

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Speaker 1: buy at the supermarket, right, and the chipping costs have

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Speaker 1: gone up. There's a whole bunch of reasons why things

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Speaker 1: have gone up in price, especially for a country like

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Speaker 1: New Zealand at the bottom end of the world.

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Speaker 2: No, the bottom end of the world argument doesn't really

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Speaker 2: stack up this. There are certain products that are imported.

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Speaker 2: But when you when you look along with supermarket shelves,

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Speaker 2: the things that we're buying every day. You know, our bread,

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Speaker 2: our dairy products, our produce, our vegetables, you know a

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Speaker 2: lot of dry grocery lines, ice cream. All of those

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Speaker 2: things generally are made made locally or in Australia where

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Speaker 2: the shipping costs are not necessarily that great, so that

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Speaker 2: those arguments don't stack up. The issue. The issue here

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Speaker 2: is the inflation over the last few years.

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Speaker 1: It's been bloody, terrible hurts every day. Ernie, appreciate you

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Speaker 1: coming on the show this morning. Ernie Newman, who's the

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Speaker 1: grocery policy expert, on the latest Grocery Report.

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