Greens take command-economy route to cheaper groceries

Summarised by Centrist

The Green Party wants regulators and courts to decide how much profit supermarkets should be permitted to make, backed by penalties reaching 10% of turnover.

Presented as a ban on “price gouging”, the proposal would give the state power to determine whether grocery prices exceed supply costs plus a “reasonable” margin.

The Commerce (Excessive Pricing in Retail Grocery Industry) Amendment Bill has been put forward by Green MP Ricardo Menéndez March.

Under the bill, the Commerce Commission would monitor supermarket prices and ask the courts to determine whether a retailer had charged excessively.

Supermarkets would have to retain three years of wholesale invoices, supplier agreements, cost changes, promotional prices and internal pricing approvals.

Companies found in breach could face the highest of three penalties: $10 million, three times the commercial gain or 10% of turnover during each accounting period in which the breach occurred.

Individuals could be fined up to $500,000.

Intentional breaches of the pricing or record-keeping rules would become separate offences, carrying fines of up to $1 million for companies and $200,000 for individuals.

Green co-leader Chlöe Swarbrick said New Zealanders paid too much for food, pointing to the Commerce Commission’s 2022 finding that Foodstuffs and Woolworths were earning approximately $1 million a day in excess profits.

“This is not a crazy nor particularly radical idea,” Swarbrick said, noting Australia introduced similar legislation last month.

Consumer NZ polling reportedly found 86% support for an anti-gouging law.

Swarbrick urged Parliament to advance the member’s bill before the election, calling it a “common-sense” way to reduce household bills.

Unless the proposal is drawn from the ballot or receives cross-party support to advance, it may go nowhere before the election.

Editor’s note: “Price gouging” suggests an obvious scam. This bill goes considerably further.

It would require regulators and judges to decide what profit margin is reasonable and therefore what prices supermarkets may legally charge.

Read more at Stuff

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