Watts Simon; Webb DuncanSIMON WATTS (National—North Shore): Thank you very much Madam Chair. I appreciate there's a little bit of competition on this side of the House this evening isn't there? What a good sign. I do want to just compliment my colleague Melissa Lee for her last contribution. But Minister I'm going to move to a different clause if I may.You've just mentioned a number of aspects around your keenness to see more competition in the grocery market and more international players coming in from overseas to compete in this market. I'm interested in your observations that one of the players within the duopoly—Foodstuffs—is 100 percent New Zealand - owned owned by Kiwis employs Kiwis and potentially your policy of promoting overseas players that are going to come in from Europe and send their profits back overseas and not stay in New Zealand for some may be a slight issue.I'm interested in your balancing act around the fact of whether you think actually nope that's all fair and dandy; as long as people get the lowest price at the checkout then you're not really that bothered around what happens and what are those organisations that are participating in the market. So that's the first question.The second question is in regards to clause 18(2)(a) which is in regards to the Commission may hold an inquiry … into whether the wholesale supply of groceries should be subject to additional regulation". Gilmours I understand is the wholesale entity under the Foodstuffs group. I guess what is being proposed here and I'm just wanting to get the Minister to articulate the practicality of what's being proposed is that in effect Gilmours may be subject to a review and may be subject to additional regulation if they potentially for some reason don't supply one of these international grocery providers that comes into the market.One of the challenges obviously in the context of competition and low prices is that scale is a considerable factor and particularly in the New Zealand market it is a small market. The reality is that subscale entities are going to potentially be more expensive. So the potential reality of trying to slice that up even more may actually lead to higher prices at the checkout which doesn't necessarily correlate with the Minister's intent around what he is hopeful this will achieve.So I think there's two key questions there. [Interruption] Sorry Simon O'Connor—Simon O'Connor: I'm just saying it's like the tenancy changes.SIMON WATTS: Tenancy changes? No good point. I didn't take it from that perspective but thanks for raising—maybe another bill will cover that point.Those two questions Minister if I may.Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Thank you Madam Chair. Firstly just a clarification in respect of Ms Lee's earlier question around the suppliers having to sell their products. It's just important to note of course that there is no compulsion for a supplier to sell into any particular grocery supplier. Obviously we want suppliers to do their part to improve competition including taking up the opportunities to sell their products into new grocery retailers either through an established wholesaler regime or directly.This feeds into Mr Watts' question because if suppliers don't and that was having an anti-competitive effect—and that is to say it is lessening competition—then there is a backstop framework. This is the point that Mr Watts was referring clause 18(2) that it's possible to have backstop regulation which could conceivably pull suppliers in.Now that's not going to be some small supplier who's got a few lettuces or cabbages or some niche goods but if some large manufacturer starts acting in a way essentially throttling the supply chain that would be problematic. So it's not prohibiting exclusive supply agreements under the regime to facilitate wholesale agreements suppliers may choose to opt-in there.In terms of overseas investments profits going overseas it's interesting to hear the National Party being—Simon Watts: Oh! Looking after your rich mates!Hon Dr DUNCAN WEBB: —protectionist. I just have a little chuckle to myself in respect of that. The Labour Party and this Government are very happy to be an international player to be promoting free trade and to have appropriate and well-managed overseas investment. And if that's an overseas player coming into New Zealand whether in partnership with New Zealanders or otherwise to improve competition to improve our market and to lower prices then that is a good thing. And Mr Smith there is no compulsory Government pricing."