Shoppers have been stocking up on Weet-bix at cheaper prices from The Warehouse after an announcement Sanitarium was cutting off the retailer's supply - a decision that has now been reversed. Photo: RNZ / Tom Taylor
Sanitarium has announced it will resume supplies of Weet-Bix to The Warehouse following controversy last week over pulling the product.
The company said it had now decided to reduce allocation to export markets so it could reinstate supply to The Warehouse.
The breakfast cereal maker had earlier cut off supply to the retailer, while keeping stocks flowing to its competitors like Countdown and Pak'nSave.
This led to customers stocking up on remaining supplies of Weet-bix from the Warehouse, which the retailer told Checkpoint it offered cheaper than supermarkets' standard pricing, at $6 for the 1.2kg family pack in all its stores.
A spokesperson for Sanitarium said it had no control over retail prices.
The Warehouse laid a complaint with the Commerce Commission which asked for a 'please explain'.
Grocery Commissioner Pierre van Heerden said it was highly unusual practice for a company to pick and choose which stores bore the brunt of its supply issues.
The Warehouse chief executive Nick Grayston had said while Weet-Bix products were said to be in short supply, the decision to cut it off was not fair because Sanitarium was continuing to supply the big two grocery chains.
In a statement, Sanitarium New Zealand said it had heard the calls from consumers.
"We apologise for any concern created for our loyal consumers. The demand from all our markets, including the Pacific and Asian markets, has risen in the last couple of years, exceeding supply capabilities and resulting in supply constraints," general manager Michael Barton said.
"We have tried in that time to prioritise allocation of Weet-Bix to service all our customers, including New Zealand's grocery, non-grocery, hospitality and export markets."
The company said it had received a letter of inquiry on 29 September from the Commerce Commission and would continue discussions and respond within its deadline.
"Our view is clear that no breach of the Commerce Act has occurred," Barton said.
"The industry process of stock allocation when supply is constrained is complex. Our view is that adopting a simple "fair" pro rata allocation across all our customers, including export customers, could in this situation result in a reduction of supply to Aotearoa."
The Warehouse chief product officer Tania Benyon told Midday Report they were pleased customers had spoken out loud and clearly about being unhappy with the move to stop stocking the retailer.
Listen to The Warehouse chief product officer Tania Benyon on Midday Report here
"We're so relieved and delighted that Sanitarium has changed their mind and we're able to get that $6 Weet-Bix back out in our stores for customers.
"It's really pointing to how difficult it is to build a grocery offer in New Zealand. There's lots of challenges, and this just happened to be one that became public and Kiwis were very quick in making it clear how it mattered to them that there's choice.
"So we're 100 percent committed to continuing this fight to make groceries more affordable and make sure that we can get the supply to do that."
The fact The Warehouse had been singled out to lose their supply completely, while exporters were still being supplied was jarring, Benyon said.
"That was fundamental to the concern that we raised with them ... when there's a manufacturing issue, making a fair decision to prorate the shortage across all customers rather than take one out completely - especially the one that had the lowest price.
"So we think that was an interesting decision that they made, but we're very grateful that they've rethought that."