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Commerce Commission assesses Countdown allegations after Jones lays complaint

UPDATED: The Commerce Commission confirms it has received a written complaint outlining concerns of alleged anti-competitive behaviour by Countdown its suppliers. 

Earlier today, a spokesman for the regulator told NBR that Labour MP Shane Jones had called Commerce Commission chairman Mark Berry, and followed up with a formal letter.

The Commission will now take steps to ascertain the basis of the allegations and whether the behaviour is a breach, Dr Mark Berry says.

“The Commission takes all complaints regarding anti-competitive behaviour very seriously. We encourage anyone who has information relevant to the allegations to contact us,” said Dr Berry.  

Suppliers and anyone else with relevant information are encouraged to contact the Commission on 0800 943 600.

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Countdown rejects Shane Jones' extortion claim - but Labour MP gets tacit backing from Rich
Countdown says it categorically rejects Shane Jones' claim it "extorts" NZ suppliers. But the Labour front-bencher has received indirect backing from Food and Grocery Council CEO Katherine Rich.

Speaking under Parliamentary privilege Wednesday afternoon, the senior Labour MP said the Australian-owned supermarket chain had demanded cash payments from Kiwi suppliers for "past losses", and told them that if they did not make the  payments, they faced permanent exclusion from the shelves. The suppliers would be blacklisted if they told anyone about the demands, he said.

Mr Jones said, "In this speech I'm fulfilling my duties as a Parliamentarian to alert us to a level of extortion that is going unchallenged in our food and grocery sector ... [Suppliers] are being told by the Australian-owned supermarket 'our profit margins did not meet the shareholders' expectations last year. We want more profit out of you'. They are demanding of Kiwi businesses payments, backdated cheques, and recompense, sir, for the losses the supermarkets assert they suffered last year." It was a "shakedown", the Labour MP said.

Mr Jones also made a series of posts to Twitter repeating the same accusations, but later deleted them. He has refused to repeat his claims, or make further comment, outside of Parliament. 

In a statement, Dave Chambers, managing director of Countdown's parent company, Progressive Enterprises, said. "We categorically reject the allegations made by Shane Jones MP under Parliamentary Privilege in the House today ... We will fully cooperate with any enquiries from the Commerce Commission."

Jones lays complaint with regulator
Commerce Commission spokesman David Irving tells NBR, "I can confirm that Mr Jones telephoned yesterday and advised Commission chair Dr Mark Berry that he would be forwarding a letter on this issue to the Commission."

Mr Jones' letter outlining his formal complaiint arrived this moring. "It will be processed in the normal way, Mr Irving says. The regulator will now have to access the Labour MP's complaint, and determine if an investigation is warranted.

Mr Jones apparently did not take his concerns to Countdown before making his allegations in the House. A spokeswoman told NBR the company was caught by surprise by his comments in Parliament.

The Labour MP appeared to receive tacit backing for his claims trom the Food and Grocery Council's Ms Rich, who read a brief statement to media following Mr Jones' comments.

"We're aware of a number of incidents where our member companies have been asked for retrospective payments. We have raised our general concerns about this practice with the supermarket chain involved," Ms Rich said.

"This is a serious issue that is new to the New Zealand grocery sector and we view it as an unwelcome development.

"We have asked members to report further occurrences."

NBR has asked Countdown for a response to Ms Rich's comments. A Progressive spokeswoman said the company would make further comment tomorrow.

Progressive is a division of Woolworths, which is facing controversy over a campaign to restrict non-local goods, including NZ made goods, from its Australian supermarkets. Some have called on New Zealand shoppers to respond by boycotting Progressive's Countdown chain.


RAW DATA: Statement by Dave Chambers, Managing Director, Progressive Enterprises

We categorically reject the allegations made by Shane Jones MP under Parliamentary Privilege in the House today.

We’re very proud to have a long history of supporting New Zealand suppliers and we have strong relationships with more than 1200 local and multinational companies here.

 As a passionate Kiwi, I am also proud of the 18,000 New Zealanders who work hard to serve our customers every day, and of the investment our business continues to make in the economy.

If any MP or supplier has questions or concerns about our business they are welcome to contact us directly to discuss them.

We will fully cooperate with any enquiries from the Commerce Commission 

Comments and questions
82

Why are we not surprised. Wws have been demanding and getting a range of cash incentives for years. Did they ever manage to get suppliers to pay listing fees and shelf space fees that they were trying to get a few years ago?
Our government gave us a duopoly and extorion is one of the outcomes.

These tactics arent new.

There is a book out there called Tescopoly - even as a strong free market supporter I found this left leaning book interesting as it outlined the tactics used in a limited competition situation by Tesco. A must read, after which I started buying local and from farmers markets in the hope of supporting small NZ producers to provide more competition and survivie against the Foodstuffs and Woolworths. A full enquiry is warranted and W/W's should be caned by competition regulators and the crown if the alleged activity can be proven.

Countdown has been doing this for years. Anyone who walks down the aisle there with their eyes open knows Kiwi product is almost nowhere to be seen.

And who makes this happen? Kiwis - because they shop there.

This is an excellent chess play by Shane Jones, and good to see. Timing couldnt have been better.

Dr Berry will have to take this (very) seriously, due to wider public interest and election year; if he wants to keep his job.

Anyone in the wholesale food industry, likely we were, will understand supplier agreements, and that they are heavily in favour of the big players; most of which happen to be Australian owned. Countdown, Spotless & Compass being examples.

NZ producers makes the best in the world, and its time to support those locally owned. While we may not be as clean and green as we use to be, go check out the waterways overseas, because we are streets ahead of most.

Campaigns little this will open the eyes of the wider public, to support locals. Farmers markets are the best way you can do this, and there are some local home delivery companies entering the market also.

The problem with this headline news in NZ is that I wonder how much of it is being reported over the ditch.
The main Aus newspapers I follow don't seem to know little NZ exists unless its something about sports.
Maybe if the average Ozzie however was told at volume and repeatedly that they are being fed rubbish quality produce compared to the supremely superior fare grown over here, even their buy local campaign would struggle to compete against a decent truthful campaign on quality. My Ozzie pals don't like to think they are getting 2nd rate in anything. We do have a problem though with the home brand products that vary in quality and I guess supplier from even month to month. Its got to a point that apart from plain basics like sugar etc I cant trust the plain supermarket own brands anymore.

It is widely reported in the Sydney Moring herald and melbourne Age today

"Rubbish quality produce" - Yeah we get that in New Zealand. Your brainwashed if you think we have better quality food over here. The best of our produce is shipped overseas, where they can buy the best of ours cheaper than us. We get the scraps. I'm amazed watching some Australian cooking/food shows on television and they have much more options than us. What are the superior products over here mate? Mainland budget/mild/colby cheeses? MMMM. Gourmet style watties tomato sauce, homogenized/pastured fertilized, genetically modified, bovine growth hormone, anti-biotisied New Zealand fontera made milk. Yeah man New Zealand has it all

Why the need to make such allegations under parliamentary privilege?

I have heard of a case where this has happened to one of our clients. There is definitely something to answer here. Unfortunately many small suppliers are living in fear of category managers at progressive (and have done for years)

I have heard about this a couple of years ago. May be it's time I dont shop at countdown any more.

Congrats to Mr Jones for taking this issue up - manufacturers are very very very wary indeed of going public on this one due ot the aggressive nature of the duopoly supermarket industry. Upset them and bang there goes your shelf space or trading terms.

Ms Rich basically confirmed in a guarded manner that Jones is pretty much on the money here.

Countdown bully NZ suppliers relentlessly and care little if these same suppliers go to the wall - they have foreign shareholders to satisfy.

Mr Chamber has made some very carefully constructed comments today which reek of untruth.

His claim that 94% of Countdown sales come from NZ suppliers - is designed to infer to us that 94% of sales go to NZ made products - when he actually is more likely to be saying that 94% of sales are to NZ operations wether they front for NZ manufacturers or foreign manufacturers. Arnotts local branch is one of his NZ suppliers yet it fronts 100% imported product - adding very little value to NZ aside from a few sales reps!

Progressive Enterprises, which operates Countdown, said about 60 per cent of its Select, Signature Range and Woolworths Australia's Home Brand were imported. Foodstuffs, which operates Pak'n Save and New World and has Pams and Budget brands, put the figure at 25 per cent. http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10913787 Consumer Watch: Home brands a foreign legion Aug 18, 2013 .

Yes, they may have foreign shareholders to satisfy but, more importantly, they have local customers to satisfy. Those customers need to be reined in they keep making unreasonable demands like cheaper prices, better quality etc on the supermarket.

Something similar to this has been going on for years, at least since my time as a supplier in the early 70s, if not quite so egregiously. How do you think there are so many specials? Are people so naiive that they think this is all done for "free"? No the supplier pays - the supermarket's margin is rarely disturbed to any extent.

On top of the discounts demanded (not offered, demanded), by the supermarkets, an "advertising" budget is billed to the supplier - who has no discretion as to how that budget will be spent. For example, as a supplier, you might wish to promote product A ... in which case a unique discount is demanded - but on top of this goes the extra advertising. Later at the whim of the supermarket you might find one of your products being super-discounted. At which point it is not unknown for the chains to demand an extra discount, as well.

Currently my industry is saddled with these demands and I have no doubt that all other suppliers experience the same. Should the supermarket (particularly in the UK), work out that it buys more than 40% of your product - they then tell you what price they will pay. Plus the advertising budget on top of course. margins (GP), have become so slim, often less than 10%, that costs are often just covered, with little account of overhead.

This is a highly competitive industry. Of course the buyers drive a hard bargain. There's nothing new under the sun.

Please, please, please let us get Aldi over here to start breaking up the duopoly.

Aldi is fantastic !
Even the staff report they love working for them.
I recall though how Ikea was treated by various council planners when they mooted setting up in Auckland and the word was Ikea decided they didn't need the aggro for such a tiny market.

>...recall though how Ikea was treated by various council planners...

Ah, council planners. The kind of geniuses who brought us the monstrosity that is West Gate, an indictment on planning degrees if ever there was one.

Agree we need both Aldi & lidl.
In both UK & Europe recently, I was stunned at the low prices in these shops compared to NZ.
We are being ripped off big time !

Well see there's the problem, they are cheap but that merely equates to the supplier getting a low price. Woolworths / PEL is rapacious because as a publicly listed company their shareholders want good returns, in order to maintain those they will naturally squeeze the suppliers.

This latest issue is about how suppliers are treated, does anyone imagine that by introducing more supermarket chains the situation for suppliers will improve? Doubt it, it hasn't in the UK.

PEL behave the way they do because they can get away with it, suppliers would never go public as they would be dropped immediately why do you think PEL denies anything like what's been suggested is happening?

SPC Ardmona is an iconic Australian manufacturer, known and loved for their canned fruit and vegetable products. The exceptional partnership between ALDI and SPC stretches back more than a decade, to the first day ALDI opened its doors in Australia. After SPC Ardmona experienced difficult times recently, ALDI has increased our support by moving our entire 825g canned fruit range to Australian Made. We are glad to pledge our support to SPC Ardmona and the local processed fruit industry. “We commend ALDI for their commitment to buying quality Australian made produce and investing in the future of food processing in our country.” Says Peter Kelly, Managing Director of SPC Ardmona. You too can get on board, by purchasing locally grown and canned Australian products at ALDI, and further supporting Aussie fruit growers. https://www.aldi.com.au/en/about-aldi/aldi-initiatives/supporting-aussie-businesses .

Peter Leitch should consider expanding into the supermarket business. He's a decent proud Kiwi and I'm sure having kiwi owned competition along with this "Badwill' the duopoly has created will factor in its success.

This declaration by Countdown that profits are not as expected (in Australia) is a warning to many NZ suppliers into that economy. Firstly the Australians are going to have a very tough time in 2014, the cross rate between $nz/$au is such that their costs are rising, similarly their cost of imports from the rest of the world are rising just as fast as their dream ore/coal profits start to dry up.

The unions still have a huge hold in Australia, hence the three auto manufacturers have opted to shut up shop. Their economy needs structural reform, so that costs of labour can be addressed, rather than looking solely at suppliers to cut back.

As for Aldi, Tescos, Safeways, Wal-Mart, they have enough trouble in their own slow markets without trying to gain a foot hold in Aus (let alone NZ) where growth rates are still tepid and the incumbents are well entrenched.

Is it the suppliers fault that the Supermarket uses their product as a loss leader?

Of course not. Supermarkets are free to set the retail price where they like , for any reason whatsoever.

And conversely , is it the supermarket's fault that suppliers clone each others' products, to the point where there are usually three or four brands of a nearly identical product?

No , so can the supermarkets be blamed for taking advantage of that?

Again, no.

The key to competition for the consumer's dollar is for a given product to have a point of difference , a strong brand , and customer loyalty.

Suppliers seem to have lost sight of this basic fact , and end up competing on price , with the result that they get picked off one at a time by the supermarket chains.

Farmer Brown, you missed the point. Sure, competition and what goes with it prevail, but what's being argued here are the bully tactics used by Progessive on their suppliers. Suppliers are forced to compete on price by these unethical practices by Progressive. In the end, the only beneficiary is Progressive - which is wrong. And as much as the Australians are boycotting our products, we should resist buying their products as well.

You say "In the end, the only beneficiary is Progressive - which is wrong. "

But you are wrong about that.
Foodstuffs also benefits because it will get the identical terms that the Progressive bullying has produced.
It is naive to suggest that Foodstuff does not employ similar tactics. I speak from experience.

This is a naive set of assumptions. The retailers deliberately and constantly support small entrants to markets with the intention of undermining strong brands. This ensures that brands have to refocus their money to support price discounting, shifting it away from building consumer awareness and loyalty. Ultimately it is in the retailers interest to commoditise a category and that is when they can step in with a house brand to really take it away from the manufacturer.

Yes of course the retailers try that. But they fail if the brand is strong, the offer is unique , and the customer is loyal.
Naive ? No way !
Having withstood repeated such attacks over the last several decades as a supplier , I'm still standing . . . and growing.

:-)

I've registered my protest by doing all my grocery-shopping at the local dairy.

That is a great idea but I'd guess if your dairy is like many other dairy's they will buy from countdown if something they stock is on sail cheaper than they can buy it from the wholesaler. I have a mate who is a rep for a large drinks company and he said the shops buy it cheaper from the supermarkets then he can supply them at times..... foodstuff or progressive will play the same games.

Will shop at Pak n Save or New World from now on.

Oh such a good idea, not. The same happenns at New World & Pack n Save. The only reson Countdown is being singled out is they are Australian owned.

The potato farmers have for years always had to fight for a respectable price for their produce, each year as the contracts came around to roll over the supermarkets tried to dictate the price. In the end they did what the panel beaters did to the insurance companies years ago boycotted, and stopped supplying to the offending party and sold their product elsewhere, then public pressure was applied and the matter was resolved.
The shelf space allocation has also been around for years, those that play the game get eye level access, those that do not get what's left.

Does Pak'nSave do this too?

Any "deal" , ostensibly "offered" to Progressive , MUST be matched by an identical "offer" to Foodstuffs.

Failure to do so will result in an immediate threat of delisting.

Does anyone ever wonder why we bother to have a Commerce Commission?

If the story is true it is a bit of a worry. Will all of the place i hold loyalty cards with that have me details now send me post dated "loss" accounts as i have got free things and good discounts.

Will WW's also be billing the large dairy companies over there for for making massive losses of the "milk promos" each store run, (Woolworths and Coles milk price fight), when milk was selling at $1.00 for two litres to get the shoppers in.

I prefer Countdown simply because their prices are lower. Maybe this is partly because they are sharper buyers. I don't know, but whatever they do works for me, obviously works for them and must work for most suppliers or their shelves would be empty.

So you're willing to put your own interests ahead of fairness (until & unless it affects you directly)?

Yes. I will go where I get the best deal, taking into account the proximity of the store. I don't think there is anything unfair about the way supermarkets buy their stock. Hard maybe, but not unfair. If you want to pay more for a tin of baked beans than I do, go for your life. Best you never buy the specials along with the baked beans, because it's almost invariably the supplier who is providing the discount - not the retailer.

Countdowns prices are cheaper? - than who the corner dairy??

CD is expensive, if you are buying on price you cannot go past Pak N Save period.

Suupliers are on CD's shelves Mungo cos they have 40% share so the market, no supplier can afford not to be in front of 40% of consumers.

A shareholder in Woolworths here, but I do all my shopping at small local stores where possible. Butcher for meat, bakery for bread, fruit&veg shop for the green stuff. Its just a more pleasant experience. Countdowns in particular are just nasty places to be in. Often look messy and the number of checkouts operating is always too low. Even at night when the supermarket is near empty, there will be a line for the checkout.

This situation is in part due to the incompetence of the Commerce Commission in approving the purchase of Woolworths (NZ) by Progressive. Does Shane Jones really believe it will conduct a rigorous investigation when it was a major contributor to the problem?

The Commerce Commission declined clearance for the purchase under the "substantial lessening of competition test" introduced in 2001, but it was appealed all the way to the Privy Council, who said the Commission had to use the "dominance" test. Under that test the Commission had no choice but to approve the sale.

If you think the Commission likes the duopoly, you obviously didn't follow its efforts to stop Woolworths taking over the Warehouse when the Warehouse began selling groceries.

You have hit the nail right on the head here, Michael.

Is this problem confined to Progressive, or do Foodstuffs do the same things too?

We sold our supermarkets to convicts. Are we now surprised at their ethics? ;-)

Support New Zealand

All the supermarkets do it: all 2 of them.

A local liquor store owner I know can buy a dozen beers cheaper from the local New World than he can from his own brewery-owned distributor.

That's only possible because of the shelving fee/rebate/wotucallit Foodstuffs extracts from their supplier.

i have a hampsta card and wondered what happened - now its pretty clear - these Aussies just keep moving the goal posts. I bet they squeezed for more margin ! BUT rather than being happy with a little bit, they lost millions of dollars in revenue. Fools.

I was present at a wine tasting at Forest Estate in Blenheim, where the winemakers (and owners) advised us that they do not sell much at retail in New Zealand, as the supermarkets demanded cash to display their excellent produce.
While that was 8 years ago, I believe the practice is still widespread today.

There are suppliers to SMs who make very serious money and could not conduct their business any other way but sell to supermarkets as it gives them access to locations and facilities they would otherwise never have unless they invested millions and millions to duplicate the selling facility.Supermarkets in the most basic sense are merely clearing houses for bulk goods at the consumer interface and a supplier will be paying warehouse rents for storage somewhere so why should they be able to enjoy a separate well setup selling facility for free.Any retailer pays a charge for their selling facility such as rent and marketing and many Vendors pay for trademe market exposure and a selling facility and a supermarket could be viewed as a highly efficient and capital intense specialised sales facility for certain classes of goods.Should it be free?How different is it from Malls charging turnover rents and marketing charges for providing the retail facility ?Thats the other side of the coin.

All suppliers pay all supermarkets extra for prime sites in the shop, lie at the front of the rows and high eye contact areas and most large suppliers have their reps stocking the shelves with their products.

However what CD and woolies are apparently doing is now stating they have lost money on some lines, but it only appears to be NZ ones.

Can you imagine your petrol station telling you that you had to pay another 10 cents on the petrol you have previously paid for and used.

I recommend you all read a book “The Shocking Power of British Supermarkets” by Joanna Blythman. Available as an Kindle Book.
The situation will be the same or similar here.
If you want to prosper don't do business with a supermarket - at least not in a major way.

We are also in the process of consolidating the insurance industry with one major Australian player.

Why does the commerce commission exist again?!

I have no doubt that Countdown use their buying power to get the best price they can out of their suppliers, as you would expect any business to do. The suppliers have a choice as to whether they accept Countdown's conditions of supply.
However do they target NZ suppliers, as Shane Jones implies, or do they impose the same conditions on all their suppliers? And do Woolworths do the same to Australian suppliers in Australia? My impression is that they do not differentiate between suppliers based on nationality but hammer all their suppliers. In which case Shane is playing on the jingoistic card for political reasons.

If these allegations are proven, I hope that the quanta of any penalty that is applied really wounds Woolworths. Even though I am a Woolworths shareholder, (and by the way, this shareholder has expressed no view whatsoever on the margins Woolworths gets from its New Zealand operations) nothing would give me greater pleasure than to see Woolworths fully divest itself of its New Zealand operations, and for Progressive Enterprises to be once again listed on the NZX has a wholly owned New Zealand company.

Category managers across Countdown are demanding "rebate" if you do not sell all the product that they took for their "loss". All this does is force promotional price down, but leave their margin unchanged. Simply squeezes the supplier. Some large wine companies have written checks to Countdown for north of 6 figures in "compensation". Those who are not playing the game, are not getting promoted in store, and sales getting hacked to bits. Complete abuse of power - and if they argue they have no power they should simply combine (2) monopsony with (2) duoplistic market structure and get =(4) market power.

Let me guess. North of 6 figures means more than 6 figures? If that is what you mean, why not just say so?

It has also been argued that Walmart, in the United States, functions as a monopsony in certain market segments, as its buying power for a given item may dwarf the remaining market. Another possible monopsony could develop in the exchange between the food industry and farmers.
http://en.wikipedia.org/wiki/Monopsony#Examples

People have accused Ernest and Julio Gallo (the big wine makers) of being a monopsony. They had such power buying grapes from growers, that sellers had no choice but to agree to their terms. http://www.investopedia.com/terms/m/monopsony.asp

In economic theory, market situation in which there is only one buyer. An example of pure monopsony is a firm that is the only buyer of labour in an isolated town; such a firm would be able to pay lower wages to its employees than it would if other firms were present. Though cases of pure monopsony are rare, monopsonistic elements are found wherever there are many sellers and few purchasers. http://www.merriam-webster.com/dictionary/monopsony .

Give up your country to Oz and what do you expect. People have no idea what is happening. Either with their supermarket supply chain to their insurance policies administered by Oz owners. One thing is sure - NZ regulators do little and do NOT monitor market practices. Yet people expect they protect them. Wake up NZ.

"The suppliers have a choice as to whether they accept Countdown's conditions of supply."

That's the truth. Most suppliers think that they have to be in both chains.

Why? Mostly because they do not have
a) unique product, or
b) a point of difference, or
c) any customer loyalty to their brand.

Anyone who has the above attributes can simply choose to sell in one of the chains. Their customers will follow them there. The only loser is the chain which does not stock their brand.

What you will see happening now (it's already happening) is that each time a product comes off "special" it will revert to a slightly higher "normal" price.
Then the very next time that it is on "special" the price will be a little bit higher, and tthe process will repeat when it comes off "special". The "normal" price will be slightly higher again.
This will continue until the supermarket has the margin that it wants.

It is important that the Reserve Bank knows what is going on here i.e. adjustment of retail margins , and does not get excited about food price headline inflation.
The Reserve Bank needs to " look through" this adjustment period.

Category managers across Countdown are demanding "rebate" if you do not sell all the product that they took for their "loss". All this does is force promotional price down, but leave their margin unchanged. Simply squeezes the supplier. Some large wine companies have written checks to Countdown for north of 6 figures in "compensation". Those who are not playing the game, are not getting promoted in store, and sales getting hacked to bits. Complete abuse of power - and if they argue they have no power they should simply combine (2) monopsony with (2) duoplistic market structure and get =(4) market power.

If we are going to have a government enquiry into this practice of demanding retrospective payments , then there is another dirty little piece of extortion that needs to be exposed.
It goes like this -
-a supplier sells into a central warehouse under a terms of trade agreement.
- the warehouse onsells to the supermarket.

End of story , right?

Nope .
-the supermarket orders too much , or forgets to put the product out on shelf before expiry. Or claims that the warehouse sent faulty product.

So the supermarket sends an invoice to the original supplier, claiming payment is owed for product that the supplier sold to the warehouse, not to the supermarket.
The rep. will be told - pay up, or you're off the shelf.
Extortion? Yep!

Does this mean that if customers choose to boycott, the cost of this will be borne by the suppliers - as obviously this would mean that the stores would have ordered too much...
or will the effect be widespread enough for some suppliers saying OK take me off the shelves?
Who are we hurting by going elsewhere - particularly if this is only for a couple of weeks?

Countdown have a computerised order sytem , operated from Australia.
Stores order a couple of times per week.
Manual adjustments are also possible.
So nobody would be hurt if product sales slowed in Countdown.
Except for Countdown .

Ww should cut their losses now and withdraw from the NZ supermarket market. They are likely to experience material market share loss now that they will never recover from. Unless they make a demonstrative and genuine effort to change their ways. Start with reversing policy of withdrawing NZ from Aussie shelves.

DUH how incredible

This is how its done in Australia for years

Priceless Com Com to the rescue given they caused it by creating a duopoly

There's no commerce act or fair trading act breach here. It's obviously undesirable if true, but the commission would need powers like the accc's unconscionable conduct powers. The accc's looking into the supermarkets using those powers in aus.

If you look at the ACCC's draft plan for the Australian supermarkets new code of conduct you will see why the supermarket buyers need reining in, and that the same rules should apply in NZ.

Now Dick Smith complains the supermarkets are ruthless. Cry me a river, dick...it was him that egged on the big Aussie grocers into their current jingoistic stance, like a Pauline Hanson of the grocery world

http://www.radionz.co.nz/news/national/236052/key-supports-extortion-claims-inquiry

http://tvnz.co.nz/business-news/heinz-threatens-dick-smith-over-nz-beetroot-claims-5341232

Countdown has to be a worry with continual price hikes and one wonders at the comment feed 4 for $15 x 3= $45 x 7 = $315 Shit that's more than half of most peoples wages. So nice of countdown to look after the kiwis, with the rounding of "you can eat this shit and it sounds cheap?????"
Aren't we kind to you kiwis. Lucky there's not 12 in your family. DONT SHOP AT COUNTDOWN AND THEYLL BE OUT OF BUSINESS. SO SIMPLE

Prior to being acquired by Woolworths, Progressive weren't much better. I have first hand experience of them blatantly lying about receiving many invoices just so they could stretch out payment. Things got much worse when Woolworths took over and moved their financial processes to Tasmania. This made commercially sense because of scale however their accounts payable processes are from the stone age, probably on purpose so they can control payments. Make one tiny mistake on an invoice and you'll be waiting months to get paid.

Given my experience with these nasty people, I haven't shopped there for 7 years. It would be nice if people gave up the convenience factor and shopped elsewhere.

The Countdown spin doctors make a big deal out of saying that they stock only NZ produced chicken, but that is only because our biosecurity laws forbid the importing into NZ of uncooked chicken.

People forget that in business everything is designed to separate you from your cash so if you feel Countdown should be send a message then do so by not shopping there, nothing gets their attention more than a drop in revenue, and maybe on the back of this the councils can ease up on the red tape surrounding farmers markets

I was shocked to find out not only did the suppliers pay for the two page colour Supermarket adverts in newspapers, but they charged at least twice their cost making a 100% R.O.I. So how much of their profit is on the sale of product and how much from big mark-ups on costs paid by suppliers including $85,000 for an end of aisle display which is cancelled if sales don’t reach target in three days? It is a can of worms now!

Don’t blame the Australians here, it’s the corporate world. Foodstuffs operate in the same manner and they are NZ owned. Its all about margins and when you are operating on 1.5% -3% of gross turnover then you have to squeeze every cent you can out of suppliers. And don’t think the suppliers are not doing that to their suppliers, i.e. fertilizers, machinery servicing etc. Every one squeezes everyone else for the lowest price. You all do the same when you go shopping for cars etc, you bargain with the sales person for the best price. Do you ever consider that you are actually taking money from the salespersons pocket, as his bonus is paid on the income he gets from the vehicle.

It business folks, if you don’t want to play the game get out of the park.

I think everyone is naive if you think its only supermarkets that do this. Most big box retailers do this and have done for years, if you are not competitive as a supplier and cant afford to pay the "marketing" and "mark down" contributions you wont be in business very long. The bigger the buyer the harder it is for the supplier - simple economics folks

One further instance of anti-competitive behaviour , that needs inquiring into , concerns the delivery of goods to supermarket warehouses.
Supermarket A (or F) buys itself a cheap transport company, and starts carting inwards to its warehouses , in competition with the independent carriers.
Just another opportunity to "clip the ticket" right? All good.

Then the independents find themselves waiting for hours to unload at the warehouse , while the supermarket -owned trucks get unloading priority. This makes the independent carrier more expensive.

And then the supermarket turns around and accuses the independent carrier of not sticking to the scheduled delivery time (booking time).
The independents turn around and carry GPS trackers in order to prove that they were sitting in the warehouse yard , waiting to unload, the whole time. Just adding a bit more cost.

You see how it works?

If all of this doesn't dissuade suppliers from using independent carriers , then there is always "accreditation" which can be withheld.

When all the independents have given up or gone broke or been "dis- accredited" , then the supermarket can charge what it likes for carrying the inwards goods.

It all comes back to the Commerce Act ; if the test is "dominant position" as the Privy Council held ; and not "substantial lessening of competition", then some tightening of the legislation needs to occur.

In the meantime the two supermarket chains, in collusion, enjoy their licenses to print money.

Competition required. A recent inquirey paid by the tax payer in cost of domestic diary products fielded little. Now the truth is really out. While these supermarket chains use their total monopoly of the grocery market to place massive demands of cash kickbacks on suppliers we all suffer. The checkout paying consumers and citizens of New Zealand pay for the greed of these dodgy dealings.

How come Raeward Fresh was allowed to be bought by Foodstuffs?
Raeward Fresh was the ONLY opportunity for Christchurch to get some sort of 3-way competition going. But no - we must have a duopoly in this country. Nothing else is acceptable. It seems that is the Commerce Commission's role.