Mooney Joseph; Dean JacquiJOSEPH MOONEY (National—Southland): Thank you Madam Speaker. I rise to speak on the Commerce (Grocery Sector Covenants) Amendment Bill. The National Party supports this bill which amends the Commerce Act 1986 adding new section 28A in clause 4 which will apply to covenants that have the purpose or effect of impeding the development of land or the use of a site for a grocery retail store deeming such covenants as having the purpose or effects of substantially reducing competition in the relevant market. The National Party very much supports enhanced competition in markets and seeing regulations and law that actually makes it easier for that competition to happen. We are in an extraordinary environment at the moment with inflation at 30-year highs in New Zealand and food as a consequence is on everyone's mind. Although this will certainly not address a lot of those issues it will make it easier for competition in the grocery retail sector which is something that is to be supported. According to the Commerce Commission restrictive covenants are promises not to do something that are registered against land and impose restrictions on how that land can be developed or used. They bind any third parties who subsequently acquire or lease that land. Examples are that first on the sale of land by a grocer retailer to a third party and a consideration for that purchase the vendor agrees to register a covenant against other land in the area that the vendor is retaining. Exclusive covenants are provisions contained in leases that restrict competitors from operating the same shopping centre. The Commerce Commission found that these generally have durations of 20 or more years so in effect this has reduced local competition which is what we have been advised. This bill will do something to actually make it easier for other competitors to come into the market and will hopefully address some of those competitive pressures that are needed to actually drive a better market. We would certainly like to see some attention by this Government on food. Food is a crucial issue globally as well as domestically. The security of food supply is something that is an increasing issue around the world and the price of food is something that's really really important for everybody. We need water we need food we need shelter and this is a bill that goes a small way but an important way to addressing the issue of food.In terms of the select committee report the Economic Development Science and Innovation Committee has examined this bill and recommends that it be passed and recommends all amendments unanimously. So it recommends broadening the scope of new section 28A which has a number of changes—to broaden the scope of the proposed section to ensure that it appropriately covers the types of behaviour that this bill seeks to prevent. They recommend inserting another section to state that any other provision of a contract arrangement understanding or covenant can be taken together with that restrictive covenant to determine whether section 28A applies. This would apply to provisions in other contracts arrangements understandings or covenants that have 1 or more of the same parties as a restrictive covenant ('side agreements'). … [The] proposed section 28A(2)(ba) would achieve the same effect for exclusivity covenants." The committee was concerned that agreements such as side letters were not covered in the terms of the initial drafting of the bill. Submitters also said that some exclusivity clauses can impede retail grocery stores at other locations not just at the same site. However the committee "did not see any reason for distinguishing between exclusivity covenants that affect the same site and those that affect other sites. Given that the bill's intent is to improve competition in the retail grocery sector the focus" the committee felt "should remain on whether the covenant impedes another person from operating a retail grocery store." Therefore the committee recommended removing the words "at the same site (for example a mall or a shopping centre)" from the proposed section. Some submitters also said that "limiting the target of the covenant to retail grocery stores would not prevent large grocery retailers from using restrictive and exclusive covenants that impede other retail developments." To restrict that type of anti-competitive behaviour the committee proposed "broadening the scope of covenants affected by the bill to recognise other retailers that may compete with a designated grocery retailer." For example I do not want to see the grocery trade continue to have the ability to restrict so-called competitors such as those selling alcohol or pet food. And the committee recommended amending new section 28A(2)(a) to state that: section 28A also applies to impeding "any other retail store that is likely to compete with the designated grocery retailer." It recommends similar amendments to new sections 28A(2)(aa) (b) and (ba).It recommends adding an express provision to the bill to ensure that the Commerce Commission would have sufficient powers to monitor and enforce 28A. The commission does have existing powers that it can use to carry out its functions under the Act. They include powers to require people to supply—[Time expired]ASSISTANT SPEAKER (Hon Jacqui Dean): I call Camilla Belich—five minutes."