The government will make a further announcement on supermarket reform this afternoon.
Higher prices for fruit, yoghurt and chicken pushed up food prices in December. Photo: 123rf
RNZ understands it will be around requiring Countdown and Foodstuffs to open their wholesale operations to smaller rivals.
In March, the Commerce Commission made a number of recommendations after investigating the sector.
It called for improvements to be made to the wholesale supply of a range of groceries at competitive prices, by requiring the major retailers to consider any requests they receive to supply competitors.
Since then the government has announced plans to introduce a code of conduct, which Commerce and Consumer Affairs Minister David Clark said would be aimed at "preventing the major retailers from using their power to push cost and risk on to suppliers".
Commerce and Consumer Affairs Minister David Clark Photo: RNZ / Angus Dreaver
It established a Grocery Commissioner who will have the ability to fine supermarkets that breach it.
Consumer NZ chief executive Jon Duffy said the government had signalled that the main supermarket chains should open up wholesale operations voluntarily.
"We don't really know what's in the announcement yet but I'd anticipate that there are some clear signals to the supermarket sector that if change isn't made voluntarily then it will be forced upon the sector," he told Morning Report.
"We're seeing the supermarkets move to lower prices on certain goods to help with the cost of living and that's really good, but it's a temporary fix and it's not structural."
Opening up wholesale supplies would give potential new entrants or small players that wanted to expand the certainty that they could able to stock their shelves, he said.
"At the moment, because the duopoly has wholesale supply all tied up in their own businesses, it's very difficult for a new entrant to come in at the retail level because they also have to bring all of the wholesaling and all of the distribution with them, which is a pretty gargantuan task."
The Commerce Commission also recommended in its March report that more land be made available for new grocery stores, by making changes to planning laws and banning the use of restrictive land covenants.
