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Supermarkets back home brands

Tom Pullar-Strecker tom.pullar-strecker@stuff.co.nz

Countdown and Foodstuffs say a code of conduct for the groceries industry should not limit their ability to offer home-brand products or allow suppliers to negotiate collectively as if they were in a union.

The Commerce Commission spent the third day of its marketstudy conference into the $22 billion industry nutting out how to design a mandatory code setting out how the major supermarkets suppliers.

The supermarket chains have agreed to support a code based on one in Australia, under which major retailers and wholesalers ‘‘volunteer’’ to abide by a scheme overseen by a governmentappointer reviewer that sets rules and provides for the mandatory arbitration of disputes.

But Food and Grocery Council chief executive Katherine Rich suggested the commission could adopt elements of a more prescriptive British regime under which a government-appointer adjudicator has the power both to arbitrate disputes should treat and fine supermarkets up to 1 per cent of their annual turnover.

If the latter penalties were applied in New Zealand, Countdown and New World and Pak ‘n Save franchise owner Foodstuffs could be fined the best part of $100 million for breaches of a new code.

Appearing by video link from Britain, former UK supermarket ombudsman Christine Tacon told the commission its regime banned large retailers delaying payments to suppliers, unilaterally changing agreements, ‘‘delisting’’ suppliers without reasonable notice, or normally charging for shelf space.

During her seven years in office, groceries prices fell 8 per cent.

But former Australian Competition and Consumer Commission chairman Graeme Samuel told the Commerce Commission that the Australian system had advantages, as arbitration was a good way of achieving cultural change.

Rich said the industry code should impose ‘‘safeguards’’ on home brands or private labels, which she said had been the major winner as Foodstuffs North Island rationalised categories and ‘‘reduces choice’’ for consumers.

But Foodstuffs NZ merchandising manager David Stewart said home-brand products were highly valued, in particular by its ‘‘budget conscious customers’’. He said home-brand products were a significant feature of competitive grocery markets around the world.

Countdown strategy director Josh Gluckman said it didn’t think ‘‘some of the posture being adopted towards private labels’’ by some submitters was in the interests of Kiwis, ‘‘and we certainly don’t think it’s in the interest of lower prices’’.

The Commerce Commission has committed to complete its market study of the industry by March 8.

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2021-10-27T07:00:00.0000000Z

2021-10-27T07:00:00.0000000Z

https://stuff.pressreader.com/article/281711207858270

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