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Speaker 1: Now the Commerce Commission has reported that we are still

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Speaker 1: getting ripped off at the supermarket. Grocery Commissioner pie Van

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Speaker 1: head and told us earlier that the ComCom is trying

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Speaker 1: to tighten up the rules to stop the duopoly from

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Speaker 1: ruling us.

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Speaker 2: There's no one silver bullet, so we've got to use

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Speaker 2: all of these different tools to their maximum effect to

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Speaker 2: try and get change within the indury.

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Speaker 1: You might need the help of the Commerce and Consumer

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Speaker 1: Affairs Minister Andrew Bailey Andrew Hallow.

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Speaker 2: Good afternoon.

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Speaker 1: What are you going to do about it?

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Speaker 2: Well, obviously there are a number of recommendations that the

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Speaker 2: Commissioner can do on his own, and he should be

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Speaker 2: doing that, and I'll be urging him to do as

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Speaker 2: quickly as possible. From a government perspective, there's two sort

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Speaker 2: of key areas. One is about allowing overseas investment to

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Speaker 2: happen more easily in New Zealand's one of the most

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Speaker 2: restrictive places in the world. But secondly, how we can

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Speaker 2: deal with some of the planning rules. So those two

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Speaker 2: pieces of the work are already underway at a government level,

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Speaker 2: but really most of this sits with a commissioner, and

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Speaker 2: I'll be urging him and the Commission to get on

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Speaker 2: with it and make it happen.

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Speaker 1: Do we have overseas like possible competitors from overseas who

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Speaker 1: are saying the overseas investment rules are keeping them out.

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Speaker 2: Not specifically on supermarkets, because we simply don't have people.

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Speaker 1: Like what are the guys like Oldie saying to you

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Speaker 1: about why they're not coming here?

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Speaker 2: I did speak to Oldie, but they just don't see

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Speaker 2: it as a market they wanted to go into. They'd

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Speaker 2: rather pursue, for instance, Australia grow their market share there.

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Speaker 1: Why not? Why are they interested in us?

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Speaker 2: Oh it's a small, diversified you know, very difficult to enter,

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Speaker 2: small market basically, And obviously people are talking about other players.

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Speaker 2: I've been talking to one or two other players that

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Speaker 2: possibly could come into New Zealand. But right now I

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Speaker 2: couldn't put my hand on my heart and say there

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Speaker 2: are lots of people lining up.

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Speaker 1: So the solution is really already in country. It's a

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Speaker 1: warehouse or something like that.

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Speaker 2: Yeah, I think. And that's a really important point hither,

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Speaker 2: because all strategies and business start with look after your

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Speaker 2: customer first, and our current customers are people like the

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Speaker 2: warehouse Costco night and day. We need to make sure

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Speaker 2: that they can compete as robustly as possible, and right

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Speaker 2: now they can't. They've got they can't get access the

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Speaker 2: wholesale supplier of produce which they should be able to

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Speaker 2: at the same price that the supermarkets currently enjoy. So

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Speaker 2: that part of the report from the Commissioner I certainly

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Speaker 2: endorsed and support.

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Speaker 1: Okay, So he says, this is p Vanhead and he

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Speaker 1: says he wants to do a Section fifty six inquiry

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Speaker 1: and he wants you to give him permission to force

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Speaker 1: the whole the supermarkets to wholesale to their competitors at

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Speaker 1: the same level the wholesale to each other to themselves.

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Speaker 1: Would you allow that?

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Speaker 2: Well, he's got to do Section fifty six and that

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Speaker 2: unlocks those backstop powers, so that's easy. He's identified a

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Speaker 2: couple of the specific issues. One is the opt out provisions.

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Speaker 2: So a number of multinationals, by way of example, have

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Speaker 2: opted out of supplier agreements with the supermarkets, which means

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Speaker 2: that a new competitive I'll give you example five Fio

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Speaker 2: and Hamilton new operator there is having trouble getting access

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Speaker 2: to toilet paper, which is a key requirement for a

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Speaker 2: SI market, So allowing those people to have access the

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Speaker 2: products is really really important.

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Speaker 1: Well, why are they unable to get access to the

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Speaker 1: toilet paper? Explain how that works?

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Speaker 2: The suppliers simply said, I don't want to supply.

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Speaker 1: To you because what they're looking after their mates at

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Speaker 1: food stuff and woollies.

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Speaker 2: Well, I can't appine on that, but what the Commissioner

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Speaker 2: wants to make sure is that people can't unnecessarily opt out.

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Speaker 2: That's one side of the coin. But also there's things

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Speaker 2: like supermarkets enjoy a price competitive advantage by having their

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Speaker 2: own branded product, and the supermarket often they buy that

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Speaker 2: at a cheaper rate than what a supplier will supply

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Speaker 2: their own branded product. And so having a like for

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Speaker 2: like basis. So if viewer night and day, you should

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Speaker 2: be able to get the same price for the home

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Speaker 2: brand price that the supermarket gets rather than the higher

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Speaker 2: price that they might have to.

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Speaker 1: How long is this going to take to do a

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Speaker 1: Section fifty six inquiry and unlock that backstop.

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Speaker 2: Oh? I think that the Commissioner will do that. He

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Speaker 2: said he's going to start that process very soon. I

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Speaker 2: think it's a matter of months.

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Speaker 1: Is it really so what in a matter of months

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Speaker 1: we could see all of a sudden the wholesale situation.

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Speaker 2: No, it's more to be done around that. Certainly unlock

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Speaker 2: some of the powers, and then it's up to him

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Speaker 2: how he implements that. He's also looking at beefing up

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Speaker 2: and putting in place a wholesale code. We don't have

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Speaker 2: one at the moment. So that's the second part of it.

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Speaker 2: And then the third part is actually enforcing making sure

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Speaker 2: that people who are supplying step markets have treat it

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Speaker 2: fairly inequitably and still having anecdotal examples where people are

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Speaker 2: not being fairly treated. And I've said to the Commis Commission,

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Speaker 2: I want you to be a courageous litigative if that's

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Speaker 2: the case, if they have to take stronger actions, get

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Speaker 2: on and make it happen.

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Speaker 1: Is the solution to all of this not simply to

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Speaker 1: break these things up, right, So you break up the

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Speaker 1: wholesale and retail arms and create some real competition there.

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Speaker 2: Well, you could jump to that. I think the first

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Speaker 2: thing will these reforms? Could these reforms lead to better outcomes?

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Speaker 2: I think the possibility is very strong that they should,

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Speaker 2: but they need to be done quickly. They're quite comprehensive

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Speaker 2: what the Commissioner's proposed, but jumping to a break up,

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Speaker 2: which a lot of participants have said that it does

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Speaker 2: raise some significant issues around you know, you're forcing the

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Speaker 2: Australian entity to be broken up here in New Zealand.

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Speaker 2: It sets a precedent, so to go down that route

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Speaker 2: you really need to act carefully. For instance, one area

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Speaker 2: that we will be looking for and I'm looking forward

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Speaker 2: to the report from the Commissioners on the one hundred

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Speaker 2: plus pieces of land that the submarkets currently own, where

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Speaker 2: in fact they are appropriate that they own them if

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Speaker 2: they're held for an anti competitive process. I'll be waiting

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Speaker 2: for advice on the Communic Commission to say are they

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Speaker 2: contrary to the comments Act? If they were and are,

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Speaker 2: then we might look at how we deal with that.

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Speaker 2: We may require investment, but I don't want to jump

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Speaker 2: ahead to that. I want to see what the advice

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Speaker 2: is and obviously have to work it through with my

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Speaker 2: cabinet colleagues.

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Speaker 1: Andrew, listen, thank you very much for talking us through that.

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Speaker 1: I really appreciate it. That's Andrew Bailey, Commus and Consumer

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Speaker 1: Affairs Minister. For more from Hither Duplessy Allen Drive. Listen

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