RUSH TAKES AIM AT NATIONAL: FOODSTUFFS BREAK-UP POLICY HAS THE WRONG TARGET
Former All Black and Foodstuffs North Island owner-operator Eric Rush has stepped directly into the supermarket election debate, arguing National has got its proposed break-up of Foodstuffs wrong and is ignoring some of the bigger forces driving grocery prices.
Rush has questioned why National is proposing structural intervention against the New Zealand-owned Foodstuffs co-operative while Woolworths New Zealand, owned by the Australian-listed Woolworths Group, would remain intact. Foodstuffs traces its co-operative model back more than a century, with PAK’nSAVE, New World and Four Square stores operated by local owner-operators.
National has proposed separating PAK’nSAVE from New World and Four Square, subject to a Commerce Commission assessment of whether doing so would benefit consumers. Supporters argue another independently operating supermarket group could strengthen competition, while critics warn duplicated distribution, technology, purchasing and other infrastructure could increase costs.
Rush argues those shared systems are precisely what give locally owned stores the scale required to compete, particularly in smaller communities. He says separating them risks creating additional overheads that could ultimately find their way onto shoppers’ grocery bills.
He has also pointed to the different tax treatment of food across the Tasman. New Zealand applies 15 percent GST to groceries, while Australia exempts many basic food products from its 10 percent GST. BusinessNZ has similarly cautioned that international grocery-price comparisons need to account for those tax differences.
Rush says the debate also needs to look further up the food chain, including the regulatory and compliance costs faced by farmers and producers, rather than assuming supermarket structure alone explains what consumers pay at the checkout.
The supermarket sector is already subject to specific competition regulation, including a Grocery Supply Code covering Foodstuffs North Island, Foodstuffs South Island and Woolworths New Zealand, while the Commerce Commission has also examined whether stronger wholesale regulation is required to help competing retailers grow.
For Rush, the election debate therefore needs to go beyond simply breaking up one supermarket group and examine the full cost of getting food from the farm gate to the family dinner table.
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