1 00:00:00,080 --> 00:00:02,279 Speaker 1: Now a food Stuff's merger is back on the table. 2 00:00:02,320 --> 00:00:05,120 Speaker 1: Possibly it's headed to the High Court today. The company's 3 00:00:05,120 --> 00:00:07,760 Speaker 1: appealing a twenty twenty four decision by the Commerce Commission 4 00:00:07,800 --> 00:00:10,160 Speaker 1: that blocked its plan to join food Stuff's North Island 5 00:00:10,400 --> 00:00:13,040 Speaker 1: and food Stuff South Island under one roof. Sue Chetwan 6 00:00:13,160 --> 00:00:14,920 Speaker 1: is the chair of the Grocer Reaction Group and with 7 00:00:15,040 --> 00:00:18,439 Speaker 1: US High Suit HI what's the basis for the appeal? 8 00:00:19,720 --> 00:00:23,520 Speaker 2: So what they're saying is that the Commerce Commission got 9 00:00:23,560 --> 00:00:27,840 Speaker 2: it wrong, that there will be more efficiencies if the 10 00:00:27,880 --> 00:00:32,280 Speaker 2: North and South can combine as one and the merger 11 00:00:32,320 --> 00:00:36,360 Speaker 2: should be allowed to proceed. Of course, the Groce Reaction 12 00:00:36,520 --> 00:00:39,320 Speaker 2: Group doesn't agree with that and does agree with the 13 00:00:39,360 --> 00:00:44,680 Speaker 2: Commus Commission in that we think that allowing the North 14 00:00:44,720 --> 00:00:51,280 Speaker 2: and South merger basically just strengthens the duopoly and makes 15 00:00:51,280 --> 00:00:55,240 Speaker 2: it harder for suppliers. And that's what the Commuce Commission 16 00:00:55,280 --> 00:01:00,680 Speaker 2: was arguing that that sort of upstream supply would have 17 00:01:00,800 --> 00:01:04,120 Speaker 2: less choice as to who they supplied their goods to. 18 00:01:04,200 --> 00:01:06,320 Speaker 2: It At the moment they've got the North Island and the 19 00:01:06,360 --> 00:01:09,959 Speaker 2: South Island food stuffs and wool with but if you 20 00:01:10,080 --> 00:01:12,880 Speaker 2: merge to the North and South Island food stuffs, you'd 21 00:01:12,880 --> 00:01:13,520 Speaker 2: be down to two. 22 00:01:13,920 --> 00:01:17,360 Speaker 1: Yeah, how much? What proportion do you reckon of? I mean, 23 00:01:17,400 --> 00:01:19,319 Speaker 1: I don't know if this is even possible to quantify, 24 00:01:19,400 --> 00:01:21,760 Speaker 1: but what proportional of the margin is caused by the 25 00:01:21,800 --> 00:01:23,720 Speaker 1: fact that we don't have that many players, that there 26 00:01:23,760 --> 00:01:25,920 Speaker 1: is a constraint in the number of people that suppliers 27 00:01:25,959 --> 00:01:26,800 Speaker 1: can negotiate with. 28 00:01:28,240 --> 00:01:30,959 Speaker 2: Look, you know the Commis Commission has done sort of 29 00:01:30,959 --> 00:01:33,720 Speaker 2: work around that, and of course the OECD has had 30 00:01:33,760 --> 00:01:36,840 Speaker 2: a view on it, and that we pay very high 31 00:01:36,880 --> 00:01:39,560 Speaker 2: prices for groceries in New Zealand, and that is simply 32 00:01:39,600 --> 00:01:42,000 Speaker 2: down to the fact that we don't really have enough competition. 33 00:01:42,080 --> 00:01:45,000 Speaker 2: We have two players and who control eighty percent of 34 00:01:45,040 --> 00:01:45,479 Speaker 2: the market. 35 00:01:46,600 --> 00:01:48,560 Speaker 1: Did you see the news over the weekend that Tesco 36 00:01:48,720 --> 00:01:49,680 Speaker 1: was courted to come here. 37 00:01:50,880 --> 00:01:53,480 Speaker 2: Yes, and they're not the only ones. The government's been 38 00:01:53,520 --> 00:01:56,400 Speaker 2: desperate to get somebody to come and of course there 39 00:01:56,480 --> 00:02:00,680 Speaker 2: is Costco here, but you know, they haven't been able 40 00:02:00,720 --> 00:02:03,200 Speaker 2: to encourage anybody in. It would be really good if 41 00:02:03,280 --> 00:02:07,120 Speaker 2: that did happen, But failing that, what would be I 42 00:02:07,120 --> 00:02:09,639 Speaker 2: guess the next best thing, or even the best thing, 43 00:02:09,720 --> 00:02:13,800 Speaker 2: is to encourage some local players to have a go. 44 00:02:15,040 --> 00:02:16,880 Speaker 1: Is this what it comes down to, because it sounds 45 00:02:16,919 --> 00:02:19,359 Speaker 1: like reading reading the reports over the weekend, it sounds 46 00:02:19,400 --> 00:02:22,760 Speaker 1: like Nikolaulas had to personally invite Tesco to take a 47 00:02:22,760 --> 00:02:25,120 Speaker 1: look at New Zealand. Is this what it's coming down to? 48 00:02:25,360 --> 00:02:28,400 Speaker 1: That we and I remember the last labor administration. I 49 00:02:28,440 --> 00:02:30,000 Speaker 1: don't know if it was David Clark or somebody was 50 00:02:30,080 --> 00:02:33,000 Speaker 1: chasing down it was aldi Do we have to actually 51 00:02:33,040 --> 00:02:36,120 Speaker 1: have our ministers asking people to consider investing here. 52 00:02:37,280 --> 00:02:40,240 Speaker 2: Look, I think we do, and and to give them 53 00:02:40,919 --> 00:02:45,359 Speaker 2: they have Surely if we're not seen as being competitive here, 54 00:02:45,440 --> 00:02:45,959 Speaker 2: I think. 55 00:02:46,040 --> 00:02:49,000 Speaker 1: But surely if I mean, these are global players, right, 56 00:02:49,040 --> 00:02:50,760 Speaker 1: they'll have read the news. They'll have looked at it 57 00:02:50,760 --> 00:02:52,480 Speaker 1: and gone, did you know what New Zealand's been talking 58 00:02:52,520 --> 00:02:54,399 Speaker 1: about for the last four or five years? They need 59 00:02:54,440 --> 00:02:56,680 Speaker 1: more supermarket players. Let's have a look at it. And 60 00:02:56,760 --> 00:03:02,000 Speaker 1: surely they're all having a look and going nah. 61 00:03:00,160 --> 00:03:03,160 Speaker 2: Look, I think that's exactly what the situation is. Whether 62 00:03:03,680 --> 00:03:07,320 Speaker 2: rightly or wrongly, they have made a decision about you know, 63 00:03:07,400 --> 00:03:11,840 Speaker 2: New Zealand's population and the competitiveness here. But the hurdle 64 00:03:11,919 --> 00:03:16,280 Speaker 2: for them is so high because the two you know, 65 00:03:16,320 --> 00:03:19,720 Speaker 2: the duopoly here has eighty percent of the market. So 66 00:03:19,800 --> 00:03:22,200 Speaker 2: you've got to come in and within a matter of 67 00:03:22,240 --> 00:03:25,440 Speaker 2: sort of two years or possibly slightly longer, but not 68 00:03:25,480 --> 00:03:30,280 Speaker 2: a lot longer, establish profitability in a country where there 69 00:03:30,360 --> 00:03:33,560 Speaker 2: is this stronghold. So you've actually got to get supermarkets 70 00:03:33,600 --> 00:03:37,320 Speaker 2: and physical buildings and get going and have the money 71 00:03:37,800 --> 00:03:40,000 Speaker 2: to sort of hold on for a few years. And 72 00:03:40,040 --> 00:03:42,840 Speaker 2: that's tough, and that's why we think, you know that 73 00:03:43,040 --> 00:03:45,600 Speaker 2: the only way to make it happen is a forced 74 00:03:45,640 --> 00:03:47,800 Speaker 2: avestment of some of the shops, now, you know, break 75 00:03:47,880 --> 00:03:50,400 Speaker 2: up New World and pack and say. 76 00:03:50,160 --> 00:03:52,120 Speaker 1: Really, I mean, you don't think that we could change 77 00:03:52,160 --> 00:03:55,280 Speaker 1: the rules even further, like make it easier to get 78 00:03:55,320 --> 00:03:57,320 Speaker 1: in here, make it easier to consent a whole bunch 79 00:03:57,320 --> 00:04:00,440 Speaker 1: of shops at once. Do kind of the red tape cutting? 80 00:04:00,440 --> 00:04:01,560 Speaker 1: Would that not be sufficient? 81 00:04:02,560 --> 00:04:06,840 Speaker 2: Locke doing that? You know that for any international player 82 00:04:06,840 --> 00:04:09,800 Speaker 2: who wanted to come in here, you know the red 83 00:04:09,840 --> 00:04:13,040 Speaker 2: tape is at its lowest level. But it's just that, 84 00:04:13,160 --> 00:04:16,120 Speaker 2: you know that very high bar in the grip that 85 00:04:16,320 --> 00:04:18,440 Speaker 2: will worths and foods. 86 00:04:18,440 --> 00:04:21,080 Speaker 1: Okay, So so you're saying, unless Nikola Willis has the 87 00:04:21,120 --> 00:04:24,760 Speaker 1: cahorns to actually break up these these big businesses. Nothing's 88 00:04:24,760 --> 00:04:26,479 Speaker 1: going to change, No big players coming in. 89 00:04:27,360 --> 00:04:29,840 Speaker 2: No, I would say that that is exactly the case. 90 00:04:30,000 --> 00:04:32,640 Speaker 2: We could hope and pray for a big international player, 91 00:04:32,720 --> 00:04:35,120 Speaker 2: but they've all had the opportunity and they've all said 92 00:04:35,240 --> 00:04:36,479 Speaker 2: it looks like it's too tough. 93 00:04:36,520 --> 00:04:38,000 Speaker 1: Good stuff. So it's good to talk to you. Thank 94 00:04:38,000 --> 00:04:40,320 Speaker 1: you so much, SOUD. Check Win Grocery Action Group CHEF 95 00:04:40,960 --> 00:04:43,200 Speaker 1: For more from Heather Duplessy Allen Drive. 96 00:04:43,360 --> 00:04:44,760 Speaker 2: Listen live to news talks. 97 00:04:44,760 --> 00:04:47,960 Speaker 1: It'd be from four pm weekdays, or follow the podcast 98 00:04:48,080 --> 00:04:49,080 Speaker 1: on iHeartRadio.