Food prices have been topical this week.
On Tuesday I raised the issue of rising food prices during question time. When the Minister of Consumer Affairs, Heather Roy was previously asked about how Kiwi families could combat rising food prices, her advice was to “shop around”. The Finance Minister, Bill English confirmed her advice but failed to address the real point of my question which is that Kiwi families can’t shop around increases in GST which will further increase food prices.
The next day there was an interesting article in the Herald about the relationship between a food supplier and one of the two major supermarket chains in New Zealand. Irrespective of the particular case covered in the article there were some interesting questions of more general application:
- Given the dominance of the two supermarket chains and the pressure they can exert how can food suppliers obtain a fair return?
- If prices paid to supplier are ‘screwed down’ who benefits – are prices reduced for consumers or are the profits of the supermarket chains increased?
- To what degree is there anti competitive behaviour in our supermarket industry? It was interesting to see the reference to legal advice about cartel behaviour being sought by the the National Distribution Union
I will be following both Mr Rai’s complaint to the Commerce Commission and any actions by the NDU with interest. Consumers are very reliant on supermarket companies for something that is fundamental – food. We need to have scrutiny on whether these powerful companies and their behaviour to consumers and suppliers.
And then there is the question of how those who work in the food industry are treated.