February 12, 2025 • 11 mins
The Government this morning laid out it's intentions to tackle New Zealand's two-horse supermarket race.
Economic Growth and Finance Minister Nicola Willis says the Government has the power to make the market more attractive and encourage a third player.
They’re planning to remove regulations discouraging other supermarkets competing.
Foodstuffs North Island CEO Chris Quin told Kerre Woodham that it’s not a surprise.
He says competition is good for the supermarket sector, and the actions they took were always with the assumption that new competition could come at any time.
LISTEN ABOVE
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
You're listening to the Kerrywood and Morning's podcast from News
Talks hed B.
Speaker 2 (00:11):
The government this morning laid out its intentions to tackle
New Zealand's two horse supermarket race. Economic Growth and Finance
Minister Nikola Willis says the government has the power to
make the market more attractive and encourage a third player.
I spoke to Minister Willis last hour. She confirmed there
is indeed interest from another party.
Speaker 3 (00:31):
Look, I am aware that we have received what's called
an unsolicited proposal. We have this year Carey set out
something called National Infrastructure Funding and Financing Company, and we've
said to all comers, if you want to come and
invest in important infrastructure, bring us a proposal. And I've
been informed that we have had a proposal. I have
(00:53):
not had an assessment of that proposal yet, so I
can't speak to the detail of it. But I also
know the Commerce Commission has spoken about the fact that
they've been approached by people looking at the market. So
what that tells me is there is some interest, and
I'm sending a very clear message today that we should
be engaging with that interest. We as a government want
(01:16):
to take those proposals very seriously.
Speaker 2 (01:20):
Very seriously indeed, and Chris Quinn, from Foodstuff's CEO North
Ireland of Foodstuffs joins me now in a very good
morning to you.
Speaker 4 (01:32):
Good morning, Kerry.
Speaker 2 (01:34):
So does this come as a surprise to hear just
how I suppose encouraging how direct Nikola Willis has been
in calling on other players to come to this country.
Speaker 4 (01:53):
It's not a surprise that competition is good for our sector, Kerry.
I guess you know, I've been in the sector nine years.
I've always assumed that new competition will come at any time,
because you know, it's entirely in their hands to do so.
And I guess you know, inside our organization, I've said,
(02:14):
let's just assume they're coming tomorrow. What are the things
we would need to do to compete for consumers? And
do them now?
Speaker 3 (02:21):
Right?
Speaker 4 (02:21):
So no surprise that competition is possible.
Speaker 2 (02:25):
Is it a surprise just how much the government wants
to see a third player, and not just this government
but the previous government as well. They're not just saying
we welcome third parties. They're saying we will do what
we can to make it an easier place to do
business to a new competitor.
Speaker 4 (02:45):
Look, I think What we do align with is that
making New Zealand an easier place to do business for
all participants in the sector is really important. You know,
we're proud of what we have achieved in the last
two or three years. New Zealand has the lowest food
price inflation rates in the OECD. Now we track prices
against Australia regularly, against a number of the players and
(03:08):
challenge ourselves to be competitive and we're across a quite
wide basket. We're pretty comfortable that we're in the game
and we do support the focus that the Minister Finance
has spoken about today around focusing on regulation that chokes
competitional will put people off because it's the same things
we would say. You know, if they were reviewed and
(03:30):
made to be simple and easy to do business in
their nature, then we all can do a better job
for consumers. So that focus is good. What we would
say is that New Zealand, unlike some other major sectors
like banking, New Zealand still has one one hundred percent
care We own major grocery retailer. We've grown from a
really small set of family businesses over one hundred years
(03:53):
to over five hundred family businesses across New Zealand now
and you know we hear that message. What the government
wants to see is small New Zealand business is growing
and where one hundred and two years are doing that,
the profits stay here and I reckon in ten years time,
I think most New Zealanders would like to think there
is still a really competitive, fighting fit New Zealand own
(04:15):
grocery retailer amongst whatever.
Speaker 2 (04:16):
Comes so funny because this always happens with the texts.
But when we were talking to Nikola will As, somebody
said a reminder, whar the food stuff stores? All stores
are independently owned by New Zealanders. Please don't lump them
in with the wool Wards consortium. Fair enough and directly
underneath that, when media and food Stuff's North Island talk
about being an owner operated cooperative, it's misleading. If you
(04:40):
look up the company's shareholdings, you'll see four people own
ninety percent while their owner operators only hold about zero
point two percent each.
Speaker 4 (04:49):
Yeah, that is a fabrication that is floating around for
a while. It is very very simple. Our circa five
hundred families that are the owner operators of our stores
are the only shareholders of the two cooperatives. Okay, they
owned the businesses where entirely that is, there is nothing
more to it than that.
Speaker 2 (05:09):
Okay, will you open up like the wholesale access.
Speaker 4 (05:14):
We already have, so there's regulation that guides this. We
report constantly to the Commerce Commission on that. It's very
transparent and very measured and very reviewed, and we have
a whotel offer. The not surprising thing that I think
a number of potential retailers are finding is that they
(05:37):
can often get a better arrangement by going direct to
a supplier because it takes out the layer, if you like,
you know that the cost of bringing it into a
third party, processing it, managing it, selling it to someone
may not be important to that retailer. So they're often
finding that they're better to go direct to the supplier.
(05:58):
And that is the nature of the market. There's not
a single choke point in this. There is circuit two
thousand supplies and multiple ways to get product, and most retailers,
you know, work very hard to buy as well as
they can, as we have to for our customers.
Speaker 2 (06:12):
I think the last time we spoke, you were looking
at appealing the decision to decline the Yes, that's right
the application for clearance to merge the two cooperatives, what's
happening there.
Speaker 4 (06:28):
So we have we have lodged our appeal following the
decline of the merger. You know, the merger. It's you know,
absolutely clear from the Minister's messages this morning. We need
to be a more productive and more efficient economy. The
biggest single idea we had on that was, you know,
there's no other large New Zealand business it's forced to
be into regions. We could see how we could save
(06:50):
a substantial amount of costs by merging and return that
to customers through price. We're not able to do that.
The appeal is lodged. The court cases quite some time away,
so it's not going to change anytimes too. We'll continue
because we still fundamentally believe in the benefits of that
merger and for our consumers actually for New Zealand and
(07:14):
its regulation, and for our shoholders and there the people
we should all be working for at foodstuffs, and you know,
we'll keep going. But meantime we've got to keep finding
the ways we can to be as productive and efficient
as we can and keep being really accountable on value
to New Zealanders and we publish every month what's happening
with our retail prices versus the cost of our goods
(07:37):
and happy to be held accountable to that.
Speaker 2 (07:40):
Do you ever, and do people within the organization ever
feel a bit aggrieved because you know, it's successive governments,
it's consumers. It's a lot of people saying you've been
routing us. We don't like it. That's the supplies too,
(08:00):
are saying it's unfair. We get driven down and they
look at you and they look at the profits and
they say it's just not fair. Do you feel that
you're unfairly targeted?
Speaker 4 (08:15):
Look, you know, we get absolutely that house cost of
living and the household budget is tough, and it's been
tough for three or four years and it's going to
be tough for a little while longer yet, so you know,
any it would be naive to go no, no, it's
all fine. It is hard, and you know, we we
employ twenty four thousand people in the North Island. We
(08:36):
know our team members and their families and we you know,
we see it really directly. So not bothered by being
accountable for that. We have to be in the right
to be in all of those communities with a family
owned business serving them comes from that. What we would
what I would say is, you know, I don't like
how this reflects down to people who work on a checkout,
(08:57):
just trying to do the very best job they can. Yeah,
and facing you know, a society full of retail crime
and a few other tensions. That's not fear or right.
And I think probably what we'd say is, you know,
hold us accountable for the full facts. And often people
aren't asking for the other side of some of those
claims and not looking at the data and the information.
(09:19):
And all I'd say is, you know, I'm really happy
to meet with our Minister of Commerce, Minister of Finance
or anyone who wishes to know more about some of
these statements and claims and go through it, because when
we get into the facts, our return on capital is
about in the middle of the world's grocery retailers. Food
price inflation in New Zealand is the lowest in the OECD,
(09:41):
and we now have data comparing our prices to the
major Australian retailers, and you know, it's challenging us on
some categories and others we're doing pretty well and We've
just got to keep doing that because we've got to
assume competition could arrive tomorrow. But I still think it's
quite important in all of our sectors to have a
major New Zealand known player that is focused on no
market but New Zealand, returning and keeping the profits here
(10:04):
and employing a lot of New Zealand doers in a
pretty cool industry.
Speaker 2 (10:08):
All right, just very quickly, just because I've got Helen
saying we have to go. But do you think in
previous years, previous generations, previous owners were a bit complacent
and took the market for granted, and that's where that
residual tension comes from.
Speaker 4 (10:26):
Look, I think, you know, business cultures have changed, right,
so you know, we're all you know, twenty thirty years ago,
I don't think you would have talked about social license
or you know, those sort of things. So I think
right across the spectrum of what a decent business is
accountable for and what you focus on, we've changed and
we've grown and we've learned. You know, I look at
(10:47):
what I know about our relationship with our suppliers. Now
I look at the dozens of small companies that we've
got behind and grown, and some of them going on
to international sex too, and we love that stuff because
that's things that make you proud, just beyond operating a
good retail business. So I think, you know, look, there
is no doubt we've grown and changed over time, which
is why I come back to why don't we just
(11:07):
spend some time judging us for the facts as they
stand now.
Speaker 2 (11:10):
Thank you very much for your time. That is Chris Quinn,
who is chief executive Foodstuff's North Island.
Speaker 1 (11:16):
For more from kerry Wood and Mornings, listen live to
News Talks at b from nine am weekdays, or follow
the podcast on iHeartRadio
You're listening to the Kerrywood and Morning's podcast from News
Talks hed B.
Speaker 2 (00:11):
The government this morning laid out its intentions to tackle
New Zealand's two horse supermarket race. Economic Growth and Finance
Minister Nikola Willis says the government has the power to
make the market more attractive and encourage a third player.
I spoke to Minister Willis last hour. She confirmed there
is indeed interest from another party.
Speaker 3 (00:31):
Look, I am aware that we have received what's called
an unsolicited proposal. We have this year Carey set out
something called National Infrastructure Funding and Financing Company, and we've
said to all comers, if you want to come and
invest in important infrastructure, bring us a proposal. And I've
been informed that we have had a proposal. I have
(00:53):
not had an assessment of that proposal yet, so I
can't speak to the detail of it. But I also
know the Commerce Commission has spoken about the fact that
they've been approached by people looking at the market. So
what that tells me is there is some interest, and
I'm sending a very clear message today that we should
be engaging with that interest. We as a government want
(01:16):
to take those proposals very seriously.
Speaker 2 (01:20):
Very seriously indeed, and Chris Quinn, from Foodstuff's CEO North
Ireland of Foodstuffs joins me now in a very good
morning to you.
Speaker 4 (01:32):
Good morning, Kerry.
Speaker 2 (01:34):
So does this come as a surprise to hear just
how I suppose encouraging how direct Nikola Willis has been
in calling on other players to come to this country.
Speaker 4 (01:53):
It's not a surprise that competition is good for our sector, Kerry.
I guess you know, I've been in the sector nine years.
I've always assumed that new competition will come at any time,
because you know, it's entirely in their hands to do so.
And I guess you know, inside our organization, I've said,
(02:14):
let's just assume they're coming tomorrow. What are the things
we would need to do to compete for consumers? And
do them now?
Speaker 3 (02:21):
Right?
Speaker 4 (02:21):
So no surprise that competition is possible.
Speaker 2 (02:25):
Is it a surprise just how much the government wants
to see a third player, and not just this government
but the previous government as well. They're not just saying
we welcome third parties. They're saying we will do what
we can to make it an easier place to do
business to a new competitor.
Speaker 4 (02:45):
Look, I think What we do align with is that
making New Zealand an easier place to do business for
all participants in the sector is really important. You know,
we're proud of what we have achieved in the last
two or three years. New Zealand has the lowest food
price inflation rates in the OECD. Now we track prices
against Australia regularly, against a number of the players and
(03:08):
challenge ourselves to be competitive and we're across a quite
wide basket. We're pretty comfortable that we're in the game
and we do support the focus that the Minister Finance
has spoken about today around focusing on regulation that chokes
competitional will put people off because it's the same things
we would say. You know, if they were reviewed and
(03:30):
made to be simple and easy to do business in
their nature, then we all can do a better job
for consumers. So that focus is good. What we would
say is that New Zealand, unlike some other major sectors
like banking, New Zealand still has one one hundred percent
care We own major grocery retailer. We've grown from a
really small set of family businesses over one hundred years
(03:53):
to over five hundred family businesses across New Zealand now
and you know we hear that message. What the government
wants to see is small New Zealand business is growing
and where one hundred and two years are doing that,
the profits stay here and I reckon in ten years time,
I think most New Zealanders would like to think there
is still a really competitive, fighting fit New Zealand own
(04:15):
grocery retailer amongst whatever.
Speaker 2 (04:16):
Comes so funny because this always happens with the texts.
But when we were talking to Nikola will As, somebody
said a reminder, whar the food stuff stores? All stores
are independently owned by New Zealanders. Please don't lump them
in with the wool Wards consortium. Fair enough and directly
underneath that, when media and food Stuff's North Island talk
about being an owner operated cooperative, it's misleading. If you
(04:40):
look up the company's shareholdings, you'll see four people own
ninety percent while their owner operators only hold about zero
point two percent each.
Speaker 4 (04:49):
Yeah, that is a fabrication that is floating around for
a while. It is very very simple. Our circa five
hundred families that are the owner operators of our stores
are the only shareholders of the two cooperatives. Okay, they
owned the businesses where entirely that is, there is nothing
more to it than that.
Speaker 2 (05:09):
Okay, will you open up like the wholesale access.
Speaker 4 (05:14):
We already have, so there's regulation that guides this. We
report constantly to the Commerce Commission on that. It's very
transparent and very measured and very reviewed, and we have
a whotel offer. The not surprising thing that I think
a number of potential retailers are finding is that they
(05:37):
can often get a better arrangement by going direct to
a supplier because it takes out the layer, if you like,
you know that the cost of bringing it into a
third party, processing it, managing it, selling it to someone
may not be important to that retailer. So they're often
finding that they're better to go direct to the supplier.
(05:58):
And that is the nature of the market. There's not
a single choke point in this. There is circuit two
thousand supplies and multiple ways to get product, and most retailers,
you know, work very hard to buy as well as
they can, as we have to for our customers.
Speaker 2 (06:12):
I think the last time we spoke, you were looking
at appealing the decision to decline the Yes, that's right
the application for clearance to merge the two cooperatives, what's
happening there.
Speaker 4 (06:28):
So we have we have lodged our appeal following the
decline of the merger. You know, the merger. It's you know,
absolutely clear from the Minister's messages this morning. We need
to be a more productive and more efficient economy. The
biggest single idea we had on that was, you know,
there's no other large New Zealand business it's forced to
be into regions. We could see how we could save
(06:50):
a substantial amount of costs by merging and return that
to customers through price. We're not able to do that.
The appeal is lodged. The court cases quite some time away,
so it's not going to change anytimes too. We'll continue
because we still fundamentally believe in the benefits of that
merger and for our consumers actually for New Zealand and
(07:14):
its regulation, and for our shoholders and there the people
we should all be working for at foodstuffs, and you know,
we'll keep going. But meantime we've got to keep finding
the ways we can to be as productive and efficient
as we can and keep being really accountable on value
to New Zealanders and we publish every month what's happening
with our retail prices versus the cost of our goods
(07:37):
and happy to be held accountable to that.
Speaker 2 (07:40):
Do you ever, and do people within the organization ever
feel a bit aggrieved because you know, it's successive governments,
it's consumers. It's a lot of people saying you've been
routing us. We don't like it. That's the supplies too,
(08:00):
are saying it's unfair. We get driven down and they
look at you and they look at the profits and
they say it's just not fair. Do you feel that
you're unfairly targeted?
Speaker 4 (08:15):
Look, you know, we get absolutely that house cost of
living and the household budget is tough, and it's been
tough for three or four years and it's going to
be tough for a little while longer yet, so you know,
any it would be naive to go no, no, it's
all fine. It is hard, and you know, we we
employ twenty four thousand people in the North Island. We
(08:36):
know our team members and their families and we you know,
we see it really directly. So not bothered by being
accountable for that. We have to be in the right
to be in all of those communities with a family
owned business serving them comes from that. What we would
what I would say is, you know, I don't like
how this reflects down to people who work on a checkout,
(08:57):
just trying to do the very best job they can. Yeah,
and facing you know, a society full of retail crime
and a few other tensions. That's not fear or right.
And I think probably what we'd say is, you know,
hold us accountable for the full facts. And often people
aren't asking for the other side of some of those
claims and not looking at the data and the information.
(09:19):
And all I'd say is, you know, I'm really happy
to meet with our Minister of Commerce, Minister of Finance
or anyone who wishes to know more about some of
these statements and claims and go through it, because when
we get into the facts, our return on capital is
about in the middle of the world's grocery retailers. Food
price inflation in New Zealand is the lowest in the OECD,
(09:41):
and we now have data comparing our prices to the
major Australian retailers, and you know, it's challenging us on
some categories and others we're doing pretty well and We've
just got to keep doing that because we've got to
assume competition could arrive tomorrow. But I still think it's
quite important in all of our sectors to have a
major New Zealand known player that is focused on no
market but New Zealand, returning and keeping the profits here
(10:04):
and employing a lot of New Zealand doers in a
pretty cool industry.
Speaker 2 (10:08):
All right, just very quickly, just because I've got Helen
saying we have to go. But do you think in
previous years, previous generations, previous owners were a bit complacent
and took the market for granted, and that's where that
residual tension comes from.
Speaker 4 (10:26):
Look, I think, you know, business cultures have changed, right,
so you know, we're all you know, twenty thirty years ago,
I don't think you would have talked about social license
or you know, those sort of things. So I think
right across the spectrum of what a decent business is
accountable for and what you focus on, we've changed and
we've grown and we've learned. You know, I look at
(10:47):
what I know about our relationship with our suppliers. Now
I look at the dozens of small companies that we've
got behind and grown, and some of them going on
to international sex too, and we love that stuff because
that's things that make you proud, just beyond operating a
good retail business. So I think, you know, look, there
is no doubt we've grown and changed over time, which
is why I come back to why don't we just
(11:07):
spend some time judging us for the facts as they
stand now.
Speaker 2 (11:10):
Thank you very much for your time. That is Chris Quinn,
who is chief executive Foodstuff's North Island.
Speaker 1 (11:16):
For more from kerry Wood and Mornings, listen live to
News Talks at b from nine am weekdays, or follow
the podcast on iHeartRadio
Popular Podcasts
40s and Free Agents: NFL Draft Season
Daniel Jeremiah of Move the Sticks and Gregg Rosenthal of NFL Daily join forces to break down every team's needs this offseason.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.