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Foodstuffs cites major progress on grocery inquiry recommendations

(Source: Four Square / Facebook)

Foodstuffs North Island says it is more than halfway through implementing unit pricing across eligible products as it works to implement recommendations of the Commerce Commission’s inquiry into retail grocery industry business practices. 

In a quarterly update on its progress, Foodstuffs North Island (FSNI) says displaying unit pricing online and on store shelves helps consumers make accurate price comparisons between product sizes – and, potentially, rival retailers. 

FSNI CEO Chris Quin said the work was progressing “at pace”. 

“We’ve recently completed Phase 1 which means the majority of eligible in-store products are now displaying unit prices. We’re on track to deliver Phase 2 by end of 2022 with various initiatives underway to make unit pricing more accessible for our customers,” he said in a statement. 

On the second issue the company is treating as a priority – land covenants – Quin said the company had released restrictions on all the property titles it owns. Covenants are of particular concern to the commission because they can restrict the right of rival retailers to open competing stores in the same mall or site. 

“On land covenants, we made the commitment in August last year to end the use of restrictive land covenants and exclusivity provisions in leases, and immediately started a process to remove all existing such clauses,” said Quin. 

“While that process is underway no covenant or exclusivity provision has or will be enforced.”

The remaining covenants are registered on land Foodstuffs no longer owns “and we are approaching the owner of each parcel of land to remove these,” he said. 

“Where we do not have the agreement of land owners to remove these, the Commerce (Grocery Sector Covenants) Amendment Bill removes that requirement so we welcome it to expedite this process.”

FSNI says its quarterly updates allow it to be transparent and accountable for implementing the recommendations and demonstrate the pace at which it is moving. The company has created an online dashboard where consumers can monitor progress. 

“Our latest dashboard update includes important recent developments and commitments in relation to the establishment of a Grocery Code of Conduct, the removal of restrictive land covenants, progress towards more unit pricing, and access to our co-operatives’ wholesale supply for non-member retailers that will collectively deliver better value for all New Zealanders,” said Quin. 

Wholesale supply progress

“On wholesale supply for non-member retailers, work is well underway at the government’s request to further develop our wholesale offer for retailers who are not members of our co-operative.”

He said FSNI has already received more than 40 enquiries from non-member retailers expressing interest in becoming wholesale customers. 

“The first step of making this work is understanding the customer need from these retailers who aren’t co-op members. We have conversations underway with those that have expressed interest and are engaging to establish their business needs so we can design a solution for them.” 

Quin said the company had also been working constructively on the Grocery Code of Conduct in recent weeks. FSNI has indicated support for a set of principles “we believe will provide clarity, certainty, fairness, meaningful consequences, and opportunities for redress when the Code is not honoured”. 

“We also support the Commerce Commission’s recommendation that a specialist grocery regulator be established with appropriate powers and resources to monitor compliance with the Code and undertake effective enforcement action where appropriate.”

He said the company remained focused on implementing recommendations of the commission that would deliver “genuine change for the industry and ultimately benefit consumers”. 

“We will continue to provide quarterly public updates via our dashboard to show our measurable progress in responding to the commission’s recommendations.”

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