The measures being proposed by Consumer NZ in their supermarket industry petition will be "counter-productive" for Kiwis, an economist warns.
The consumer watchdog launched a petition calling for the Government to regulate access to wholesale supply to help bring down massive supermarket profits on Tuesday.
The petition is calling for Commerce and Consumer Affairs Minister David Clark to "act now to create more competition, make profits fair, and lower grocery prices for New Zealanders".
But Auckland University of Technology economist Dr Richard Meade told Newshub Live at 8pm on Tuesday that the measures the organisation is calling for could backfire on consumers.
"I think it's perfectly understandable for them [Consumer NZ] to be doing what they are doing, but we should only be pressuring the Government to do something if there is something useful for the Government to do," he told presenter Ingrid Hipkiss.
"I'm a bit concerned that the measures being proposed are in fact counter-productive and could hurt consumers rather than benefit them."
Dr Meade is calling for more competition in the grocery sector and is urging the Government to make sure the pathway for international players is a straightforward process.
"Already looking at things like making sure there aren't regulatory barriers for setting up new chains of supermarkets," he told Newshub.
"This is where the Resource Management Act itself is actually a bit of a regulatory hurdle and it can take an awfully long time to get retail sites consented."
Dr Meade said Kiwis should expect to see a non-traditional retailer - like Amazon - enter the grocery sector soon.
"The fundamental constraints are really the size of our market and our low population density, but as technology improves ... we should expect to see some sort of entry by non-traditional players anyway," he told Newshub.
"We know Amazon is entering overseas in various segments in the grocery supply chain, and we can imagine that could actually happen here in New Zealand perhaps - even supplied from Australia - but we are not there yet."
An alternative suggestion is for the Government to set up its own wholesale supplier, but Dr Meade said it's not an idea he's in favour of.
"It's hard to think of compelling examples around developed countries where we see this. If your best examples are countries like Cuba, Venezuela and the former Soviet Union, you have to wonder if this is something for New Zealand," he told Newshub.
"It's hard to think of models where you have state-provided multi-product wholesalers being great providers of goods at the right time, at the right price for consumers. We simply don't have compelling examples of this. But asking for the Government to be the wholesaler and to save us all, I think is a big stretch."
Global retailer Costco is set to open in Auckland in August and Dr Meade said this will only be good for Kiwis.
"We are already seeing the signs of emerging competition that are quite strong and quite disruptive that might change the game quite a bit," he said.
Watch the full interview Dr Richard Meade above.
