Smith DamienDAMIEN SMITH (ACT): It is an honour tonight to be here for this bill and to have the two Ministers responsible for its passage through the House. The bill itself does claim to seek to improve competition and efficiencies in the grocery sector on behalf of the benefits of consumers and it responds to some of the recommendations of the Commerce Commission's market study into New Zealand retail grocery stores. I did invite Mr Webb to come to see Costco with me but he never took me up on that and I was just wondering had he been there yet or not to finalise this?Hon Dr Duncan Webb: If you yield—I'll answer if you want.DAMIEN SMITH: No I asked you to come with me.Hon Dr Duncan Webb: Do you want me to answer that question?DAMIEN SMITH: No. You know we'll have ultimate confidence in this bill once Michael Wood buys shares in the Australian supermarket industry so we can get some piece of the action here in New Zealand. So as a Labour Party broker—and as David Seymour says a broker could be his next profession. We believe that that would be a confidence measure of extreme standards. Tex Edwards from the consumer-busting-commerce organisation said this is fantasy legislation" written by lobbyists and would create a "Disneyland" department within the Commerce Commission. It represents what's weak about public policy in New Zealand. And his view and I tend to share this is that instead of having bitty business models like Costco does—a certain type of structure—what the public is looking for is a like-for-like third party operator that comes to New Zealand to give consumers a better offer and I don't think this bill facilitates that.Does the Minister believe that forcing supermarkets to act as wholesale suppliers to their competitors would discourage the international food retailers from entering the New Zealand market? I think it would and I think if you look—it needs a complete repeal of the Resource Management Act. Nobody from the Overseas Investment Office was consulted about this bill and you know we'd certainly like to see some work in the future to build on this document which would cover those areas.Hon Dr Duncan Webb: Welcome to the 1970s!DAMIEN SMITH: You're the one that was talking about fixing profits for an organisation like a supermarket.So the Minister doesn't show any concern that all that requiring supermarkets to act as wholesale suppliers to their competitors would encourage existing new retailers to raise their prices to cover losses—this may occur as a result but nobody's done that analysis. In terms of international examples nobody in the advisory panel has been able to show compulsory Government pricing isn't effective to increasing competition. So will this bill provide for greater incentives for international food retailers to come here; enter New Zealand? Well if you don't remove the overseas investment approval process for OECD countries—which my bill proposed which was shot down by the Labour Party or easing the consents process to build new supermarkets what is the possibility over the next 10 years of new entrants coming here? And I don't think the answer is rosy. Does the Minister believe also that to increase new market entrants the Government should have actually opened the door to embrace new business models? I'm a big fan of the Asian supermarket chains in this country; I think they could be expanded into something quite competitive and I looked at their prices and I'm sure Naisi Chen would support me on this: they are very competitive in terms of domestic produce. So there is something going on there which we don't know about.But a box is a box; and IT systems fridges a management system and staff is what makes supermarkets in the right location work. So food price inflation comes from regulating farmers it being too expensive to get water local regulation bodies—and that's why we've got food price inflation in this country. It isn't that there isn't enough supermarkets and where they're situated; it's the input side of the process. Local suppliers with big brands and lazy product development: are they going to provide price competition? Well supermarkets is a good example where it's the fast-moving consumer goods product marketers that said that and the margins are pretty standardised. So what you're paying for is either a smaller impact now or a bigger price which is set by the international conglomerates to profit from New Zealanders not necessarily the supermarket chains. In terms of where we go from here we believe that over the next five years for new entrants even if the Commerce Commission has recommended against designation that would mean an entrant like ALDI could be compelled to supply all of its competitors with products from all these global supply chains at regulated prices. But if the Minister believes it to be in the public interest does the Government believe that it should encourage potential entrants like ALDI—and why would ALDI even consider coming here with the kind of risks hanging over it to get a supermarket chain built? In terms of capital you probably need $100 million just to buy sites in this country; trying to get through the regulatory process and local authority level is next to impossible. And you know some of those things are what is stopping people coming to this country and that is stopping competition. Just to talk about Land Information New Zealand it reported no conversations as of October 2022—and I stand to be corrected on this by the Minister—with the Government about grocery entries. If more grocery retail entries is in the public interest shouldn't the Overseas Investment Office be directed to consider grocery retail entry as being the public interest? And isn't that the role of the Minister to direct that organisation to facilitate new entrants to this market to fulfil the bill's ambition which is more consumer choice more consumer confidence and better prices? How does this Government believe that a regulator can set and enforce regulated prices across thousands of individual grocery products—many of which will be perishable and of varying quality? Mr Clark when he gets his bike and goes cycling round Dunedin and maybe he can put the white coat on in the afternoon and go and check the prices and report back through an algorithm about what is actually happening in the real world. Because I know Mr Webb goes to Moore Wilson's and doesn't see the harsh reality of life in New Zealand for the public. So we will not be supporting this bill. The overview of industry competition is very simplistic and we believe there's still an iteration after this where the major entities—which are the supermarket chains—should be made to face up to a like-for-like third party operator who can give them a run for their money and who actually can bring real competition to the New Zealand market."