Commerce (Grocery Sector Covenants) Amendment Bill

I move, That the Commerce (Grocery Sector Covenants) Amendment Bill be reported to the House by 16 June 2022 and that the committee have authority to meet at any time while the House is sitting except during oral questions, during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House and outside the Wellington area despite Standing Orders 193, 195, and 196.

I consider that there is urgency—just by way of reason—in addressing competition in the grocery retail sector. It is a key driver of the price, quality, and range of grocery services offered to New Zealanders, because high grocery prices contribute to food insecurity, particularly for lower-income New Zealanders. By rapidly considering the bill, the Government is clearly signalling our intention to improve competition and outcomes for consumers.

It’s a very discrete element of the reform programme. It can be dealt with reasonably quickly. Exclusive and restrictive covenants will be prohibited immediately once the bill comes into effect. I anticipate the competitors will begin to consider new sites shortly thereafter.

It is well-considered. The major grocery retailers have already signalled that they intend to remove restrictive covenants. In fact, Foodstuffs North Island has already removed—it’s stated publicly—over half of its restrictive covenants.

But it is important to get right. That’s why we are recommending this go to a shortened select committee process, to address any loopholes that might inadvertently prevent a competitor from accessing land for new stores. Following the select committee’s report back, I intend to pass this bill swiftly thereafter.

So it’s relatively straightforward, it can be progressed within a shorter time frame, it’s a discrete proposal, and it situates the change in the Commerce Act under “Restrictive trade practices”, which means that the changes are nestled within existing process, remedies, and compliance measures, which the sector is familiar with and have all been well-tested.

The question is that the motion be agreed to.

The process for a select committee is absolutely essential, and the questions that we pose from the ACT Party absolutely are fundamentally necessary for the protection of businesses in New Zealand and new entrants to New Zealand.

We would like that full process to be honoured in the select committee and to take the time to get this right. We would like to make sure that this process isn’t just used as a legal tool; that it’s actually used as a tool that the industry understands and we expect submissions from the industry.