1 00:00:00,080 --> 00:00:03,440 Speaker 1: Brace yourself. The Grocery Commissioner has got some ideas. They're 2 00:00:03,440 --> 00:00:06,120 Speaker 1: looking to simplify the grocery supply code by removing the 3 00:00:06,160 --> 00:00:09,000 Speaker 1: fear amongst suppliers, are pushing back on supermarket demands, and secondly, 4 00:00:09,000 --> 00:00:10,920 Speaker 1: they're looking to cut back on promotional payments in the 5 00:00:10,960 --> 00:00:14,960 Speaker 1: wholesale market. Pavender hidden is the Grocery Commissioner, of course, 6 00:00:15,000 --> 00:00:17,880 Speaker 1: and is with us. Very good morning to you. Good 7 00:00:17,960 --> 00:00:20,160 Speaker 1: morning man, now call me Olfair. I thought we'd already 8 00:00:20,160 --> 00:00:21,880 Speaker 1: done this. Have we not done any of this or 9 00:00:21,880 --> 00:00:23,000 Speaker 1: were we just talking about doing this? 10 00:00:24,960 --> 00:00:28,360 Speaker 2: Mike. We've done a market study which indicated some issues, 11 00:00:28,560 --> 00:00:32,280 Speaker 2: and what we have done subsequently is delved more deeply 12 00:00:32,440 --> 00:00:36,000 Speaker 2: into things so that we can understand exactly what's happening 13 00:00:36,040 --> 00:00:39,080 Speaker 2: in the industry. And that is why today I've raised 14 00:00:39,080 --> 00:00:43,519 Speaker 2: two issues to prove outcomes for consumers, and those two 15 00:00:43,600 --> 00:00:46,800 Speaker 2: are as you mentioned the five billion dollars that are 16 00:00:46,840 --> 00:00:51,519 Speaker 2: being paid in promotions by suppliers to retailers, and then 17 00:00:51,640 --> 00:00:57,160 Speaker 2: also changing the rules to simplify the rules and really 18 00:00:57,200 --> 00:00:58,200 Speaker 2: make it more efficient. 19 00:01:00,120 --> 00:01:03,080 Speaker 1: To be clear, are these things going to happen or 20 00:01:03,120 --> 00:01:04,960 Speaker 1: are you just announcing them as ideas? 21 00:01:06,600 --> 00:01:10,280 Speaker 2: No? They're not just ideas, Mike. The draft code is 22 00:01:10,400 --> 00:01:14,520 Speaker 2: actually being published today and it has been published. What 23 00:01:14,560 --> 00:01:17,280 Speaker 2: we are saying in that is we want to simplify 24 00:01:17,440 --> 00:01:21,399 Speaker 2: things for all the suppliers out there. It's a complex 25 00:01:21,959 --> 00:01:25,280 Speaker 2: code that's been in place. We saw early on that 26 00:01:25,520 --> 00:01:29,000 Speaker 2: it wasn't delivering what was expected, and that's why we 27 00:01:29,040 --> 00:01:32,640 Speaker 2: announced that we will be reviewing it and we are 28 00:01:32,680 --> 00:01:36,200 Speaker 2: looking now to change it so that supermarkets can't push 29 00:01:36,319 --> 00:01:41,600 Speaker 2: their costs like for instance, wastage and packing shelves and 30 00:01:41,720 --> 00:01:45,440 Speaker 2: other costs onto suppliers. So it's simplifying the way that 31 00:01:45,480 --> 00:01:46,679 Speaker 2: they do business. Right. 32 00:01:46,720 --> 00:01:48,880 Speaker 1: So just once again to try and be clear, are 33 00:01:48,920 --> 00:01:51,920 Speaker 1: you doing this it will start tomorrow, or are you 34 00:01:52,000 --> 00:01:54,640 Speaker 1: in some sort of consultative process where this's gets dragged 35 00:01:54,640 --> 00:01:55,280 Speaker 1: on even longer. 36 00:01:56,640 --> 00:01:59,520 Speaker 2: As a regulator, we have to consult. So there's a 37 00:01:59,600 --> 00:02:03,800 Speaker 2: sex weeks only a six week window to consult where 38 00:02:03,840 --> 00:02:08,040 Speaker 2: we take on views from the supermarkets, from suppliers and 39 00:02:08,120 --> 00:02:11,200 Speaker 2: others that are interested, and then we make a decision 40 00:02:11,280 --> 00:02:13,680 Speaker 2: as to which way we go, and then of. 41 00:02:13,560 --> 00:02:17,440 Speaker 1: Course that decision is final and will be enacted. 42 00:02:18,720 --> 00:02:21,919 Speaker 2: That's correct, it will come out as a code, and 43 00:02:22,440 --> 00:02:25,200 Speaker 2: that will then be the new code that is applicable 44 00:02:25,480 --> 00:02:27,920 Speaker 2: to all suppliers and supermarkets. 45 00:02:27,960 --> 00:02:31,320 Speaker 1: When will that happen, We. 46 00:02:31,200 --> 00:02:34,000 Speaker 2: Foresee that not to be later than September because of 47 00:02:34,040 --> 00:02:37,760 Speaker 2: the time frames, the regulatory timeframes that are involved in this, 48 00:02:38,560 --> 00:02:41,519 Speaker 2: and those are set down for us and we've got 49 00:02:41,520 --> 00:02:42,359 Speaker 2: had yea by them. 50 00:02:42,720 --> 00:02:45,000 Speaker 1: Your sense of it at the moment is the supply 51 00:02:45,160 --> 00:02:48,119 Speaker 1: code will be curtailed completely. In other words, there will 52 00:02:48,120 --> 00:02:50,960 Speaker 1: be no payments, or it will be adjusted slightly, so 53 00:02:51,000 --> 00:02:53,799 Speaker 1: there will be some payments, but not as many. 54 00:02:54,600 --> 00:02:56,880 Speaker 2: We want to change it so that all the cars 55 00:02:56,919 --> 00:03:00,920 Speaker 2: outs that are currently there are taken away. So currently, 56 00:03:02,160 --> 00:03:06,720 Speaker 2: smallest suppliers have difficulty in pushing back against these large 57 00:03:06,840 --> 00:03:11,679 Speaker 2: retail large supermarkets because of the power imbalance. They want 58 00:03:11,760 --> 00:03:14,840 Speaker 2: to retain their relationships, They want to make sure that 59 00:03:14,919 --> 00:03:18,160 Speaker 2: their stock is on shelf, so they scared when they 60 00:03:18,200 --> 00:03:20,680 Speaker 2: do that and you know that and everyone in the 61 00:03:20,720 --> 00:03:23,920 Speaker 2: media because you can't get a supplier to speak openly 62 00:03:24,000 --> 00:03:28,560 Speaker 2: about it. So by taking these carve outs out, we're 63 00:03:28,600 --> 00:03:32,840 Speaker 2: making it simpler. In the current code, their carve outs 64 00:03:32,880 --> 00:03:37,760 Speaker 2: provided these supermarkets to X and y. Unfortunately, it's become 65 00:03:37,840 --> 00:03:40,360 Speaker 2: the norm. I got it, and that's not what was intended. 66 00:03:40,400 --> 00:03:43,800 Speaker 1: I understand. Where is that? Do you what's your gut 67 00:03:43,880 --> 00:03:47,000 Speaker 1: say if you did that, would that allegedly fix whatever 68 00:03:47,040 --> 00:03:49,160 Speaker 1: it is you found to be needing to be fixed, 69 00:03:49,320 --> 00:03:50,520 Speaker 1: or are you going to have to break them. 70 00:03:50,480 --> 00:03:55,360 Speaker 2: Up on the supply code that will fix it. There's 71 00:03:55,440 --> 00:03:58,480 Speaker 2: also what we're announced on the promotional spend on the 72 00:03:58,520 --> 00:04:04,280 Speaker 2: wholesale because our wholesale market isn't working effectively. Any larger 73 00:04:04,480 --> 00:04:06,960 Speaker 2: player that has come and spoken to me about coming 74 00:04:07,000 --> 00:04:10,520 Speaker 2: into the market, first thing they say is we can't 75 00:04:10,560 --> 00:04:14,280 Speaker 2: get a proper supply of groceries at a price that 76 00:04:14,360 --> 00:04:17,160 Speaker 2: we can compete on. And the reason for that is 77 00:04:17,200 --> 00:04:24,520 Speaker 2: suppliers are paying supermarkets five billion dollars in rebates and promotions. 78 00:04:24,839 --> 00:04:28,120 Speaker 1: I've got that. What I'm asking about is that part 79 00:04:28,160 --> 00:04:30,120 Speaker 1: of what you're announcing, is that going to solve the 80 00:04:30,120 --> 00:04:33,440 Speaker 1: so called supermarket problem or are you going to go 81 00:04:33,480 --> 00:04:35,480 Speaker 1: down this willers track where we need to break these 82 00:04:35,480 --> 00:04:36,360 Speaker 1: big companies up. 83 00:04:38,080 --> 00:04:41,400 Speaker 2: There's no one silver bullet, unfortunately, Mike. We've got to 84 00:04:41,440 --> 00:04:44,520 Speaker 2: pull all the different leavers we have and my task 85 00:04:44,720 --> 00:04:48,400 Speaker 2: is to improve competition in the long term for key 86 00:04:48,480 --> 00:04:52,680 Speaker 2: we consumers, and that is both competition and efficiency, and 87 00:04:52,720 --> 00:04:57,560 Speaker 2: if we can get the playing markets level, it will 88 00:04:57,680 --> 00:05:00,880 Speaker 2: encourage others to compete, even smaller players who are in 89 00:05:00,920 --> 00:05:04,400 Speaker 2: the market currently. If you look at Auckland as an example, 90 00:05:05,000 --> 00:05:08,719 Speaker 2: you know, the major players are down to seventy just 91 00:05:08,839 --> 00:05:11,960 Speaker 2: over seventy percent. I think it's seventy four percent market share. 92 00:05:12,560 --> 00:05:14,760 Speaker 2: In the rest of the country they're still at eighty two. 93 00:05:15,520 --> 00:05:18,440 Speaker 2: So if we can get more of those into the market, 94 00:05:18,560 --> 00:05:23,080 Speaker 2: the costcos and others, and even the online grosses, we 95 00:05:23,200 --> 00:05:26,120 Speaker 2: can make a difference even for rural consumers. 96 00:05:26,600 --> 00:05:29,880 Speaker 1: Fantastic. What well, yeah, okay, maybe we'll get you back 97 00:05:29,880 --> 00:05:32,440 Speaker 1: another day and argue about that, But that's pe evn Hidin. 98 00:05:32,600 --> 00:05:34,320 Speaker 1: Do you like what he says? Do you understand what 99 00:05:34,400 --> 00:05:36,080 Speaker 1: he says? Do you think it's going to make any 100 00:05:36,080 --> 00:05:40,000 Speaker 1: difference once the promotional supply code things sorted? Are you 101 00:05:40,040 --> 00:05:43,080 Speaker 1: going to see tenner beans cheaper? Do you believe any 102 00:05:43,120 --> 00:05:46,200 Speaker 1: of that? For more from the Mic Asking Breakfast, listen 103 00:05:46,240 --> 00:05:49,200 Speaker 1: live to news talks. It'd be from six am weekdays, 104 00:05:49,440 --> 00:05:51,480 Speaker 1: or follow the podcast on iHeartRadio.