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Pierre van Heerden, New Zealand’s Grocery Commissioner, has unveiled his ‘Top 3’ things to fix within the country’s $25 billion supermarket sector.
Just over 100 days into his role, van Heerden says he will focus on three key issues: pricing integrity, supplier behaviour, and barriers to entry and expansion.
He says that while the key opportunities and issues may change over time, those are the three issues that need to be addressed now.
Van Heerden says undesirable behaviour from some suppliers could negatively impact new and emerging retailers, consumer choice and the prices consumers pay.
“Suppliers play a vital role in the grocery sector, and there are many trusted and iconic brands in New Zealand who have considerable influence,” he says. “Consumers expect them to adhere to the spirit of the Grocery Industry Competition Act – to increase competition in the sector.”
This week, at the Food & Grocery Council Conference, van Heerden will be addressing suppliers with what he says is a simple message: to be a trusted and favourite brand in the grocery sector, suppliers have a responsibility to co-operate with the grocery regime and play fair in the system.
“Consumers expect this of them, as their brands are built on consumer trust,” he says.
He says Registered Grocery Retailers (RGRs) are now required to sell wholesale groceries to retail competitors, enabling alternative retailers access to more products at better prices and allowing them to better compete in the sector.
“We are aware that a number of influential suppliers appear to be opting out of the RGRs’ wholesale offers and insisting on supplying direct to smaller retailers but at much higher prices, which is having a negative impact on retail competition,” van Heerden says.
He says he hopes more suppliers will come to the table and engage with this wholesale regime.
“I will be keeping an eye on this behaviour and exploring possible options for action so that Kiwi consumers and the whole sector, including suppliers, can benefit from more supply options and more retail competition in the long term.”
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