We don’t have a supermarket duopoly – we have a double-headed cartel

There are tens of thousands of New Zealanders involved in food production and millions of us are food consumers. Yet between the large numbers of producers and even larger numbers of consumers is a narrow bottleneck of just two companies – Foodstuffs and Countdown – which control the supply, and the price of our food.

Yes, we have farmers’ markets and some small independent food retailing companies but these are niche food suppliers. The vast bulk of food consumed in Aotearoa New Zealand passes through the grasping hands of just two food companies which, incidentally, use every means available to them to keep out competitors. Why wouldn’t they?

These two profit-hungry corporates control food pricing at every step. They decide what price they will pay suppliers of food and what price they will charge us to buy the food. Don’t think for a moment these prices are negotiable. The supermarkets decide how much they will pay suppliers, and when they will pay them, and there is no way they would tolerate any customer trying to negotiate their grocery bill at the checkout. Total control of pricing at each stage lies with the supermarket duo.

In theory, because there are two companies competing, those magical “market forces” we hear so much about should be keeping prices under control but the so-called market is almost a complete fiction.

Human beings are creatures of habit. Only a miniscule number of people will examine prices across supermarkets before they go grocery shopping. We fall into habits of shopping when it’s convenient for us – fitting it into our day on the way to and from work or at times in the week most convenient for us. Human nature means we will never be the rational beings in the fairytale free markets of neo-liberal economists.

Human behaviour and the rapacious behaviour of the corporate food giants mean that for all practical purposes we are the hapless victims in the hands of a ruthless, two-headed corporate cartel.

Government attempts to regulate food supply and food prices are woeful. Treasury says we could chop billions off our food bills by forcing the supermarket giants to sell part of their businesses to allow a third company to enter the market and so increase competition. I think this is wrong headed. How long would it be before we are being screwed by a cartel of three companies rather than the double headed hydra we face at the moment?

The government should step into the bottleneck space between producers and consumers and nationalise the supermarket chains. Why should food, an essential for life itself, be left in the hands of private corporate profiteers?

Leaving it to the supermarkets and “light-handed regulation” has got us to the point where only drastic action can get the changes we need. And for those of you who think this might be a step too far, ask someone struggling to put food on the table if they are happy for corporate investors to be fleecing them every time they walk through a supermarket door.

And on a related note there were protests against our supermarket giants across the country yesterday and while I was unable to attend the Christchurch protest, I’m told that of all the signs out on Moorhouse Avenue the most “toots of support” were not for placards calling for affordable food but for a large placard saying “Tax Corporate Profits”.

Amen to that.