Mike's Minute: Nothing will change from the supermarket inquiry

Author
Mike Hosking,
Publish Date
Thu, 29 Jul 2021, 10:37AM

Mike's Minute: Nothing will change from the supermarket inquiry

Author
Mike Hosking,
Publish Date
Thu, 29 Jul 2021, 10:37AM

Are we paying too much for groceries in this country?

The problem with the question is the answer most people will give you is emotive, not factual. And there is, if you're after fact, no real answer at all. Because what is too much? And who decides?

Nevertheless, the Commerce Commission's draft report into the grocery industry is out today. They went into the exercise after David Clark, well known mountain biker, stated that we had one of the most concentrated grocery markets in the world.

That might be true, but it's true for a reason. It's not easy doing business at the bottom of the world with a small population and a weird geography.

There is no point, as many do, in sighting Australia and America as places where the prices are way lower than ours. Of course, they are. They're big, we aren't.

The report found fault for no other reason than all reports find fault. When was the last time someone charged with looking at an industry came back and said," you know what? It's perfect." Nothing is perfect so it's those imperfections that are highlighted today.

The key is whether they're bad enough to do anything about.

This is about as silly as the report into the petrol industry. Head fuel expert Jacinda Ardern told us we were being fleeced at the pump. Her deputy Kris Faafoi said as a result we'll see savings of up to 33 cents a litre.

Are you seeing those savings? Of course, you're not. The same way you won't see the price of tomatoes go down. Why? Because prices are complex, competition is intense, and prices on laundry powder, like petrol prices, vary widely depending on a whole bunch of stuff.

Are you in a town or city? How many supermarkets are close to you? Is it on special or not? Is the discount bigger if you buy more? Is it a loss leader? Is it at the end of the aisle? Is it a new product or old? Is it weather and/or transport affected? Is it locally produced or imported? Is it seasonal? You can go on all day.

What about the feed in factors? Have the wages for the workers been increased? Has the petrol from the transportation got a tax on it? Have the growers been given extra sick leave or annual leave? The government has and does play their role as well.

So simple question; short of the Government turning us into Cuba or Russia, and price controlling the market, will things change as of today's report?

Answer? No.