The government says it will pull out all the stops to increase grocery competition but Monopoly Watch says it will probably require a break-up of the existing duopoly.
The government said international supermarket chains and investors were interested in setting up shop in New Zealand and it was committing to helping them do it.
Minister for Economic Growth Nicola Willis said the government was "dialling up the pressure" on New Zealand's grocery duopoly and would make it easier for others to set-up and compete.
Willis said consumers were paying among the highest prices in the OECD for kitchen staples.
"I'm ready to pull out all the stops to get them a fairer deal. The supermarkets will fight back I'm sure. It's a fight worth having."
Speaking at the opening of the two-day New Zealand Economics Forum in Hamilton, Nicola Willis spelled out the findings of a 2022 Commerce Commission report showing "competition between grocery retailers is muted, profits are high, product ranges are limited and shoppers pay higher prices than people in many other countries".
While she used her speech on Thursday to strongly signal how the government might get shoppers a "fairer deal", no announcements or immediate changes had been made.
Willis recognised that breaking the duopoly would require people with private capital taking a risk. Photo: RNZ / Libby Kirkby-McLeod
Speaking to media after her speech, Willis recognised that breaking the duopoly would require people with private capital taking a risk.
"I can't force a third entrant in. I can't promise that to New Zealand. All I can do is open my arms as wide as possible to say you are really, really welcome and we want to work with you," she said.
Monopoly Watch research director Tex Edwards said a competitor would need scale to a similar size in order to effectively compete on price.
"And scale here is billions of dollars, not hundreds of millions, and it's hundreds of stores, not five or 10 stores," he said, adding that consumers were becoming more aware of what it would take to create true price competition.
"Kiwi consumers are becoming more literate about the difference between pretend competition and real competition.
"What I found very encouraging about the Minister's statement is that she was talking about price competition, and she was talking about cost of living, and the literacy here of this government, or what it would take to break up cartels, is getting better and better, and I think consumers can be encouraged by it."
Edwards said the government's call for expressions of interest from third parties could be a game changer.
Willis said the government would remove unnecessary barriers to entry.
"That could include removing unnecessary regulatory hurdles in the Overseas Investment Act, Resource Management Act and the entire regulatory maze; helping them to access suitable land and properties for development; helping them to attract capital; cracking down on predatory pricing and ensuring they have fair access to products."
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