The Grocery Commisioner sent a message to the Woolworths and Foodstuffs in April about fair treatment and negotiation of supply contracts. Photo: RNZ / Marika Khabazi, Simon Rogers
The Grocery Commissioner says one of the key measures to improve competition in the grocery market isn't working properly.
Pierre van Heerden has started a review of the Grocery Supply Code, which only came into force last September and is aimed at improving the relationship between the two big chains and suppliers.
He said there are reports suppliers are concerned about how they are being treated by Woolworths and Foodstuffs.
"Some of the signs I am seeing is that suppliers are very fearful of repercussion, there's a lack of trust."
Pierre van Heerden. Photo:
"The grocery agreements that were sent out to them in September, more than 50 percent of them are unsigned. So it shows me things aren't working the way they were intended."
Van Heerden said the review aimed to hear from all sides and show ways to get the system working properly.
He said there was a longstanding imbalance in power between the supermarket chains and suppliers and it would take time to change entrenched attitudes and behaviour.
But he said he was ready to wave a "big stick" if necessary to get Woolworths and Foodstuffs to change.
"What we can do is to create a framework that is safe for people to negotiate with."
Van Heerden sent a message to the Woolworths and Foodstuffs in April about fair treatment and negotiation of supply contracts.
Pierre van Heerden said he would meet the big chains soon about their behaviour and attitudes, but if necessary the code would be amended, revoked, or replaced.