Willis to announce govt plans to encourage third supermarket competitor

Cabinet has agreed to its next steps in its war on the country's supermarket duopoly, set to be announced by the Finance Minister on Sunday.

Nicola Willis took over responsibility for the supermarket delegation earlier this month, after newly appointed Commerce and Consumer Affairs Minister Scott Simpson proactively identified a conflict of interest, understood to have a close family member owning a supermarket.

Andrew Bayly had been doing the job but quit his ministerial warrants last month after an incident with a staffer in his office.

RNZ understands Willis, who is also Economic Growth Minister, will this weekend announce decisions taken by Cabinet to incentivise and encourage a third player into the market.

It's required sign-off by Cabinet on several additional levers it can pull to improve access.

Those levers could be related to tax incentives or infrastructure assistance, for example, government-owned land being freed up at significant sites for a new operator.

While Willis has already indicated there is interest from businesspeople in New Zealand considering consolidating to create a supermarket chain, she has also been working on how to incentivise an international player entering the market.

RNZ understands no announcement or confirmation of a third player will be made on Sunday, as that work is still ongoing.

In February, Willis used her speech at the opening of the two-day Economic Forum in Hamilton to make a case for greater competition in the supermarket sector.

At the time, she said her preference was for a local company to take on the duopoly giants - Foodstuffs and Progressive.

She noted there had already been expressions of interest from overseas but would not say who or how many, citing commercial sensitivities.

Foodstuffs and Progressive have already been prosecuted by the Commerce Commission over "inaccurate pricing and misleading specials" and a probe by the commission into the wholesale market is due to wrap up and report back by the middle of the year.

In February, Willis told RNZ a quicker, but less preferred, fix would be splitting up one or both of the existing duopoly or requiring them to give up unused land to new competitors.

She's open to the recommendations from the commission's investigation.

"The alternative is to not do anything and to let the current arrangement become more and more entrenched," she told RNZ.

"I think it's better to be taking action now."

rnz.co.nz