Bayly AndrewANDREW BAYLY (National—Port Waikato): Thank you Madam Speaker. It's a pleasure to be talking on the Grocery Industry Competition Bill first reading. I suppose the only concern is that here we are talking at quarter to 12 at night when people won't be listening to this. Only a very few will be listening to this. It's a shame that this bill is being dealt with and handled under urgency. But anyway it is what it is. This bill is an important step in terms of making sure that New Zealanders can get access to a full range of grocery products at an appropriate price. It's very appropriate in a day that follows yesterday with the Reserve Bank increasing the official cash rate by 0.75 percent—75 basis points; a record increase—and New Zealand facing a cost of living crisis. Part of it as the Minister referred to comes from food inflation but by no means only that. Certainly the Reserve Bank Governor was talking about the significant impacts of very constrained labour arrangements and also fiscal policies of the Government. Come what may this bill is about making sure that people can have the choice and we are concerned about the cost of living increases on New Zealanders as they go about their business.We will support this bill but we do have some concerns particularly with what's referred to as the wholesale regulatory backstop. The Minister's talked to some extent on it and I will cover off on that shortly. First of all I think it's worthwhile just talking about the main elements of the bill. The first bit really deals with the grocery supply code of conduct. This is about imposing duties on regulated grocery retailers and they're a defined term—that means Countdown and the two Foodstuffs organisations—there's a North Island one and a South Island one. Those two entities must put in place a grocery supply code of conduct and you would expect it would be in place. Most industries do it and this is a way of enshrining it and making sure that that takes place. The purpose of the code is to promote fair conduct and practices and we believe that's an important component in making sure that where there is significant power exercised by one side of a transaction there should be clarity and transparency around the code of conduct. There are rules if that's not complied with and I'll talk about those penalties in due course.The second thing deals with the establishment of a Grocery Commissioner and this person will have the power to request quite a significant amount of information from grocery retailers with a view to making sure that New Zealanders can get access to the full range of products at an appropriate price. This is an important step. It's pretty unusual for New Zealand but it is more common overseas. We support the idea of a Grocery Commissioner. Our public comments have been that if you are going down this route—if this is the route we are choosing to go down and we're supporting this—it is important that the commissioner has sufficient powers to undertake their duties and to be able to conduct and actually bring about change if that is necessary.The third thing relates to this issue of wholesale supply of groceries. The Minister alluded to it. There have been problems in the industry where smaller players cannot get access to suppliers because they don't have the scale and in fact end up buying their products like many of us here in Parliament who go to the supermarket actually going to a Pak 'N Save—that's a common one—and buying products and then taking them back perhaps to their dairy or whatever operation they have. That means that they are having to compete using a higher retail price rather than a wholesale price and what this part of the bill is about is making sure that wholesale providers of groceries—and there are smaller players like Night 'n Day which is one example—who do offer competition to the large supermarket chains will be able under these provisions in this bill to get access to products at a wholesale price. Again we think that that's not an unreasonable request and actually it's something that will help promote competition. So there are four types of additional regulation. The first one is a requirement to establish implement and maintain a wholesale framework for supplying groceries; the second one is to comply with the wholesale code; thirdly to supply groceries on non-discriminatory terms; and to supply groceries in accordance with specified terms. The big part about this is making sure that if there are wholesale arrangements that a big grocery chain has put in place then those same equivalent terms should be available to significant competitors in the market because not everyone can assemble the array of competitiveness and range from a whole stack of suppliers and there have been allegations made that in many cases—or well in a number of cases the large chains have restricted the access of competitors to some of the supplies. Whether that's true or not and some believe it is this will mean that those second-tier—if I can use that term—competitors can get access to products at a wholesale price. The other part of this is enforcement and dispute resolution. There is dispute resolution so that the entities and suppliers for instance can go through a process of making sure that they are getting reasonable terms with the large chains. Then in terms of the enforcements there are actually four tiers and it's referred to in the bill—and this is something that we'll be keen to explore in the select committee stage—as to what tier 1 2 3 and 4 means. But if you are a tier 1 organisation which I presume is a large retailer the maximum penalty is up to $500000 for an individual or $10 million for a body corporate whereas for tier 2 it reduces to $200000 or $3 million. Again we would like to understand what does that mean what is the rationale for those penalties and why are those particular monetary amounts viewed as being appropriate. The last part is the amendment to the Fair Trading Act and this is going to make sure that these types of contracts are dealt with and can be captured under the Fair Trading Act. So the Fair Trading Act will be amended to include grocery supply contracts with an annual value threshold of up to $1 million when the relationship first arises. So those are the key elements of it. From our perspective we do have some concerns—as I said at the outset—around the wholesale regulatory backstop. We will want to understand what that means. We want to make sure that it is appropriate and it is something that should be put in place and that it is not an overreach but at the moment it's slightly unclear in the bill and we're looking forward to exploring that further in the select committee stage. But this is an important bill. We think it's important for New Zealanders and that is why we are supporting this bill to select committee but with some concerns that we will seek to get clarification on during the course of the select committee stage.