Supermarket, building goods price review would give consumers more options - expert says

A review into supermarket and building supply prices could provide "a greater hope for competition," according to competition and regulatory law expert.

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Competition and regulatory law expert Andy Glenie sees some merit in Labour's re-election promise. Source: Breakfast

Labour is promising to review supermarket and building supply prices if re-elected, to ensure New Zealanders are not paying too much for their groceries and house-building materials.

Labour Leader Jacinda Ardern said her party would launch market studies that would "have the potential to help, by providing us the information we need to act" to bring prices down if needed.

"Groceries are one of our most regular expenses, and buying or renovating a home is the biggest investment many of us will make in our lifetime, so we want to make sure pricing is fair," Ardern said.

Glenie Legal's Andy Glenie says if Labour are re-elected they'll call on the Commerce Commission to launch an investigation into the markets.

"They can be quite complex, so it takes time to take a proper look and see whether there are some features of these markets that aren't working well, that aren't producing good outcomes for consumers," Glenie told TVNZ1's Breakfast this morning.

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The supermarket review would be launched this year, the building supplies review in 2021. Source: 1 NEWS

After receiving a report from the commission, the Government will then consider the options available to them, including potential law reform.

He said changes to the retail fuel market to promote competition acts as a precedent for the supermarket and building supplies markets, as well as proof that the process "can work quite well".

"There was always a suspicion that the retail fuel market wasn't working as well as it could," Glenie said.

"Going through this process has allowed everybody to see exactly how it had developed over time, and one of the things that they found was that there had a complexity around the wholesale level of that market."

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Labour promises review into prices New Zealanders pay at supermarkets - 'We want to make sure pricing is fair'

The Commission made several recommendations, which the current government took on board, passing the legislation in August.

He said there is also "certainly a greater hope for competition" in the building materials market, adding that there "are only a few players" due to how the industry developed over time.

Glenie said there is also what is known as "integration," where a player operates at "both levels of the market" by, for example, manufacturing a product and running a retail outlet.

"That integration has the potential to have a real impact on final outcomes as well."

He recommended governments to look into making tweaks - something that is "relatively small, relatively easily done" - to the market to make competition better for consumers, including greater transparency in relation to pricing, as well as taking into consideration the impact of suppliers on small producers.