New Zealand won’t follow France and the UK in introducing grocery price caps, Commerce Minister Duncan Webb has told Interest.co.nz
The website reports the UK government is planning a voluntary cap on the price of basic food items such as milk and bread, similar to a deal struck in France in March between the government and most major supermarket retailers.
But Minister Duncan Webb says his priority is addressing food-price inflation through the Grocery Industry Competition Bill.
He says while price caps may help address short-term affordability concerns, there can be unintended consequences including discouraging producers from supplying goods due to reduced profitability, they may stifle innovation, and lead to shortages or lower quality products in the long run.
The website also reported Countdown will freeze prices on more than 100 “key grocery lines” till August 20.
Asked for comment on this, NZFGC Chief Executive Raewyn Bleakley said:
“With escalating input prices and a tight labour market, freezing prices can cause challenges to any business, and the suppliers NZFGC represents are no different.
“Food and grocery suppliers are in a highly competitive environment and are constantly looking for efficiencies and having to balance many factors beyond their control.
“Setting the prices they sell their products at to retailers involves negotiation and it is entirely up to the retailers what they set the price that the products appear on the shelves at and consumers ultimately pay.”