Woolworths owns the countdown and is the owner of Fresh Choice and Super Value.
Suppliers point to power imbalances caused by twins when negotiating with supermarkets.
“There is very little competition in the New Zealand grocery market,” said one supplier. “This is evident from FSNI’s behavior over the past two years, where they implemented unreasonable changes and threatened to remove or reduce the masks if suppliers did not agree to new terms or ways of working. In my 17 years in the industry, I have never seen bad behavior from a chain.”
“The Food North is negotiating a win or any mood, regardless of the partnership or the financial credibility of the suppliers,” said another. “Both Southern and Progressive Foods continue to operate with integrity, a collective mindset and a value mindset.”
Seventy-two percent of the surveyed suppliers said they had challenges with FSSI, followed by 69 percent for Countdown, 29 percent for Super Value & Fresh Choice and 12 percent for warehouse.
The power imbalance is evident in the fact that 82 per cent of the surveyed suppliers “threatened to fire a customer for disagreement” [supermarket] Rules or margins “.
In response to power imbalances, 93 percent of surveyed suppliers believe a code of conduct is required.
One-third said they had successfully implemented price increases over the past 10 years, while suppliers were concerned that this had only happened every 2 or more years.
In an earlier submission to the Commission, FSNI argued that there were no grocery doubles in New Zealand. It said the shift in consumer shopping habits caused by food tools and online shopping has increased competitive pressure on FSNI.
FSNI argued that it was “priced competitively at the North Island level and in every local market”. It confirmed that it “does not consider accommodating behavior among retailers in the New Zealand grocery sector”. They outlined systems for suppliers with complaints.
In its submission, the Woolworths NZ grocery industry acknowledged that it was “very energetic and intense competition.”
The Commerce Commission’s study is expected to establish a code of conduct for suppliers and supermarkets.