SYDNEY (Reuters) -New Zealand said on Wednesday it would introduce laws in November to fast track the approval process for new supermarkets in a bid to boost competition and bring in lower prices.
Finance Minister Nicola Willis said her centre-right government’s proposed rules will speed up and simplify the process to open or expand supermarkets in the country.
“We’re creating an express lane for new supermarkets to boost competition and deliver better deals for Kiwi shoppers,” Willis said in a statement.
Tough regulations and a slow approval process for new applications are blocking new competitors from gaining a foothold in the country’s grocery sector, dominated by Foodstuffs NZ and Australia’s Woolworths, Willis said.
Some respondents to a government-initiated feedback process on the sector have argued for the break up of Foodstuffs and Woolworths, Willis said.
But she said any decision “to restructure the supermarkets is not a decision that would be taken lightly” though a cost-benefit analysis will check the specific options for restructuring the duopoly.
“It would be a significant intervention that would carry costs and risks that would need to be rigorously weighted against the potential benefits to shoppers,” Willis said.
The government will instead streamline the entry of new supermarkets by appointing a single authority to oversee the entire process and also modify the foreign investment rules to clarify investment pathways.
Companies could be prosecuted if they misuse their market power to exclude or stamp out competitors, Willis said.
U.S. retailer Costco, which opened its only store in the country in Auckland in 2022, has informed the government that the initiatives to boost competition will help with the company’s future expansion plans in New Zealand, she added.
Five domestic companies have also expressed interest to enter the grocery sector.
(Reporting by Renju Jose in Sydney; Editing by Raju Gopalakrishnan)
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