Photo: RNZ / Richard Tindiller
The Labour Party is promising to do more to help new players enter the grocery market, but one of the mid-size existing players thinks the idea is too expensive and unlikely to succeed.
The party's consumer affairs spokesperson, Duncan Webb, said they would support companies wanting to enter the New Zealand grocery sector with loans and regulatory changes, such as ensuring land was available.
This was in addition to the Grocery Industry Competition legislation which established a Grocery Code of Conduct and a Grocery Commissioner.
However, Night'N Day retail chain chief executive Matthew Lane said supporting another supermarket chain to set up in New Zealand would be cost prohibitive.
Woolworths estimated it would cost $400 million just to rebrand its Countdown stores over the next few years. Lane said it would be reasonable to assume it would cost much more than that to enter the market and establish a brand.
"How much does it actually cost to generate a business of this kind to provide meaningful competition for these guys?"
He believed the government would be better off focusing on fixing the current market conditions. Lane said the best action would be to break-up the duopoly's brand power, so Foodstuffs would no longer also have control of New World, Four Square and PAK'nSAVE brands, while Woolworths would not control Countdown, Fresh Choice and Super Value.
"It's what was proposed in the first draft (grocery competition) report, which to be fair made the most sense," he said.
"I think they got the answer right the first time, but there's just been a lack of willingness to actually go through with what the most effective tool would be."
Lane said there was little chance of some major player entering the market, as the incumbents continue to expand their grocery empires at pace.
On Monday, Webb said the policy on supermarkets was a much more proactive step than what had been done in the past.
"We have been talking to parties that want to enter the grocery industry but there are barriers, and we want to make sure we can actively remove those barriers and give new entrants the assistance they need ... we've said that we could remove regulatory impediments, we could provide financial assistance, or we could actively look for locations where they could locate their new businesses."
He clarified to reporters the financial assistance could mean loans, rather than grants, and the party "wouldn't be handing out money hand over fist".
National Party leader Christopher Luxon said his experience in the sector had shown him the value of having a Grocery Commissioner with effective powers, and a code of conduct, but taxpayer money should not be used to prop up or support a new entrant into the market.
"We'd also love a third player to come into the market place, but the way that you do that is you actually make it easier for them to do that, and our Overseas Investment Office process is very torturous, also our Resource Management Act doesn't make it easier as well, or attractive."