Kedgley Sue: General Debate 
Kedgley Sue: General Debate 
[Volume:665;Page:12763] 
SUE KEDGLEY (Green) 
: 
 Tena koe Mr Speaker. On Monday I was contacted by a citrus grower in Gisborne who was annoyed that he was getting 70c a kilo for his lemons and they were on sale at the local Pak ’N Save supermarket for $3.99 a kilo. That is a 570 percent difference between what he is getting for his lemons and what the supermarket is charging for them. He told me that he was getting $1.20 a kilo for his grapefruit and they were retailing at the supermarket for $6.99. That is a 582 percent difference between what the grower gets and what the fruit is sold for. Another citrus grower who contacted me last week told me he was getting 60c a kilo for his lemons and they are selling for $5.49 a kilo at his local supermarket. That is a 1000 percent difference. 
Hon Maurice Williamson 
: Why does this member get all the citrus growers? 
SUE KEDGLEY 
: I say to Mr Williamson that even if he thinks this is irrelevant I assure him that it is not irrelevant for ordinary New Zealanders. Even if we allow a generous 12 to 20 percent deduction for a wholesaler’s commission that still leaves a whopping 500 to 900 percent supermarket mark-up on lemons and grapefruit. 
When I recently released a survey of 75 growers some commentators sought to justify these exorbitant margins on fruit and vegetables by claiming that supermarkets have to transport the fresh produce and they have to store it. But in fact this is not the case. It is the growers who have to pay the costs of transporting their produce to the supermarket the costs of storage and most of the costs of promotions or specials for their produce. A 550 percent mark-up by supermarkets on lemons and grapefruit is exorbitant whichever way we look at it. Frankly it is obscene especially when we consider that these extraordinary mark-ups on fresh fruit and vegetables which of course are the very foods that we want people to eat are putting them out of the reach of ordinary New Zealanders and especially when we consider that supermarkets sell liquor so cheaply that they are literally luring teenagers and young people to purchase liquor. Therefore they are contributing to our under-age drinking culture. Last night I was contacted by someone in the liquor industry who pointed out that 70 percent of beer and wine consumed in New Zealand is sold in supermarkets and a lot of it is sold at below cost. My contact said that 2 weeks ago the local Countdown supermarket was selling a 24 pack of Tui Gold for $28.99 when the normal retail price is $42.69 and the cost price is $31. The supermarket was selling this liquor at well below the cost of production. 
On the one hand our supermarkets are making exorbitant margins on fruit and vegetables yet they are routinely selling liquor at below cost and without any mark-up at all. In other words their pricing policies are influencing our eating habits and the nation’s diet but unfortunately in exactly the wrong direction. Supermarkets are encouraging New Zealanders to buy cheap alcohol and discouraging us from buying fresh produce. Rahui Katene has a member’s bill that would remove GST from the price of fruit and vegetables. Aside from the obvious question as to how we can be sure that supermarkets would pass on a reduction in GST to consumers and not just pocket it themselves the clear implication from my survey is that the supermarket margins not GST are the real reason for the high cost of fresh fruit and vegetables. If we are serious about trying to reduce the cost of fresh fruit and vegetables which one would hope this Parliament is we need to introduce the sorts of policies that the United Kingdom has in the face of similarly exorbitant supermarket mark-ups with a code of practice an Ombudsman and a Commerce Commission inquiry. 
The price of fruit and vegetables has increased by 28 percent over the past decade yet most of the growers whom I spoke to said they were getting the same price for their fruit and vegetables as they were getting 10 or 15 years ago. Where has that 28 percent price increase gone? Has it gone into the coffers of the supermarkets? The local citrus grower whom I talked to on Monday mentioned that he had made a loss of $50000 last year.