Kerre Woodham: Should the government be bankrolling new supermarkets?

I think it's a little bit rich when you've got Chris Hipkins cancelling a debate because of Covid and people send him "best wishes" and "get well soon"s, instead of accepting the good wishes graciously and using the time to recover at home, out go attack ads saying Chris Luxon is a chicken for refusing to reschedule the debate.  

They offered to put up Kelvin Davis against Christopher Luxon, but that's hardly like for like is it? National said no, if it's going to be a battle of the deputies, sure, we'll put up Nicola Willis. Labour said no, that's not good enough, we need to reschedule.  

These are the last few days of the election campaign. If Labour's diary is yawning and open and has plenty of spaces that says more about them, I think than it does about National. It's really, really hard to find time to reschedule. You know, we're doing that with Christopher Luxon's team. They want to come back on. They suggested Thursday, but he's already been on for two hours with Mike, we think that might be a little bit of overkill. So they're trying to find a space in their diary with the best will in the world. To call him a chicken for refusing to debate Kelvin Davis!  

It's incredible to me to think that Chris Hipkins’ team did think he did such an amazing job in the last debate, like he was so brilliant, absolutely on fire, that Christopher Luxon is running scared. I don't know what debate they watched, but that's not what I saw. I saw Chris Hipkins looking better and improved, but certainly not enough to strike fear into his opponent. It just looks a bit like dirty pool. You pulled out, your problem. Don't make it Christopher Luxon’s and his teams. 

Onto the announcement yesterday from Labour saying that they were going to look at bank rolling companies who want to enter the New Zealand grocery market, in a bid to break up the supermarket duopoly. They've been gunning for the supermarkets for some time –remember the Commission of Inquiry into supermarkets? Labour's commerce and Consumer affairs spokesman Duncan Webb said if re-elected, Labour's support for new companies could include finance, making sure land was available, regulatory changes, incubating innovation and accelerating competition.   

Webb said the behaviour by Sanitarium, who of course refused to supply The Warehouse with Weet-Bix, citing ‘supply issues’, highlighted why the existing players couldn't be trusted to sort out the market. The inquiry into competition in the grocery business showed the two big companies that control the grocery industry are making excess profits of around $1 million a day.  

I don't know what excess profits are. What's the excess? How much are you allowed to make before it becomes excess? So I've never really understood what they mean by excess profits, but nonetheless, following the inquiry, Labour established a grocery code of conduct, appointed a Commissioner, banned restrictive land agreements that locked new entrants out of locations for new supermarkets (which I think that was a good move), made unit pricing mandatory and required major grocery retailers to open wholesale offerings. But that's apparently not enough, hence the government saying, hey, if we get in anybody who wants to start up a grocery store contact us.  

Why? Why would you do that? Well, the founder of online grocery retailer Supie, Sarah Balle, spoke to the Mike Hosking Breakfast, and she supports the idea of Government funding. 

“Government funding has delivered us a national airline, being Air New Zealand, it has delivered us rural broadband to areas across New Zealand so that we don't have Internet poverty. We have Government funded electricity companies, so there's absolutely a case to be made to ensure that we don't have food poverty in New Zealand. The Government is investing in a supermarket that generates returns that we can pull back into supporting food producers and really improving the health of our population.” 

Umm, but are they? I mean, basically all they say it would be is a loan. It's not like they're going to take any of the profits that may or may not be made by the retailer and put them back into the food supplies. All they’ve said is they'll supply a loan.  

ACT says it's a form of woolly corporate welfarism. National says taxpayer money should not be used to prop up or support a new entrant into the market. There's no guarantee it'll be a success. And I do wonder at the wisdom of bankrolling wannabe grocers when the big multinational companies around the world have had a look at New Zealand and said Yeah, Nah.  

Grant Robertson sees the multinationals have had a look. He cited German discount supermarket ALDI as one of the players in the Australian market that people can take a look at. A spokesman for ALDI confirmed it has no current plans to expand into New Zealand. It'd be great if it did. They set up shop in Australia in 2001 and helped drive down prices. Although it took more than a decade for it to become the country's third biggest player. It costs a lot to establish a nationwide supermarket. It costs a lot to hang in there for 10 years to become profitable.  

So is that what we want to do with taxpayer money? Have a punt on another supermarket? Supie is looking to expand. It's an online grocery startup, but it says it's signed up about 55,000 customers, has about 130 staff and is now planning physical stores and has already mapped out of first location. They want to be a disruptor, much like 2degrees. Supie wants a slice of the estimated $22 billion supermarket industry, which is controlled by store-owner co-operative Foodstuffs and Australian retail giant Woolworths through its Countdown chain.   

Should the government be bankrolling people who want to have the Super yachts, who want to have the lovely luxury lifestyle that they see, you know, the supermarket owners in their district having? They look at the trappings of success and think, I want a bit of that. They don't realise that these people have been working 18/19/20-hour days on the shop floor for years and years and years before the pay off.  

And how would it work? Do the profits go back to the Government to go back to the food producer, as Sarah was saying? I don't think so.  

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