The change goes further than what was recommended by the Commerce Commission in its review of the $ 22 billion groceries industry – it said any wholesale regime should be voluntary.
“If you’re a new competitor in the market you simply can’t compete if you can’t get access to wholesale,” said Commerce and Consumer Affairs Minister David Clark.
Patel said that currently the wholesale prices “are very different from what they get and what we get”.
The Government has told supermarkets to negotiate wholesale supply agreements in good faith, but there’s a question mark over when the new law forcing them to do so will be introduced.
Clark hopes by the end of the year, and then it’ll have to go through Parliament before being passed into legislation. Only after that will there be a legal requirement for the duopoly to offer fair wholesale prices.
“If the Commerce Commission was not satisfied that progress towards workable competition was being made, as you’d expect it can choose to put regulatory tools in place,” said Clark.
But the Government hopes it won’t come to that.
“We are fairly confident that even though we have a full legislative process to come, that we will see change before these rules take effect,” said Prime Minister Jacinda Ardern.
Woolworths said it’s already onto it, saying it has “50 plus small retailers… who have expressed interest in becoming wholesale customers”.
Those who grow the veggies that appear on supermarket shelves welcome more transparency but say it should go further.
“If consumers could see how much a good costs when it reaches the shelf, and then how much they pay for it and develop an understanding of what is fair for retailers to charge based on that, then I think we can only win,” said John Murphy, Vegetables NZ chairman.
Whether consumers will be winning as a result of Wednesday’s change and how soon is still unclear.