Grocery Industry Competition Bill

Members, the House is in committee on the Grocery Industry Competition Bill. When we were last considering this bill, we were debating the question that Part 5 stand part.

I just wanted to confirm that we can talk about Supplementary Order Paper 353?

CHAIRPERSON (Hon Jenny Salesa): Yes, we can, at this part.

ANDREW BAYLY: We can. OK. Obviously, a number of changes have been proposed in the Supplementary Order Paper 353. There’s two issues I just want to pick up on: most of this is pretty self-explanatory, but I just want to refer to clause 64—there’s a new term put in here under 64(1)(a), which refers to “and … ancillary services”. I’d be quite keen if the Minister could take the opportunity just to explain exactly what the intent of that is; and then there’s obviously quite significant changes to subclause (4)—hopefully the Minister can just give us a bit of the insight into those specific changes.

CHAIRPERSON (Hon Jenny Salesa): So the advice that I have, Andrew Bayly, is that clause 64 is part of Part 3, not Part 5. So I’ll give you another call to talk about another part—within Part 5, please.

OK, I’m just picking up on this new Supplementary Order Paper (SOP). Maybe the other aspect I was just keen to talk about is actually clause 163, which is in Part 5. So there’s been a change under this SOP as well, which introduced the concept that whilst it’s intended that there will be a Grocery Commissioner, in many respects that person will operate alone. Under the SOP change, there’s now the introduction of two or more members of the commission and it then sets out when that takes place. I’d just like to hear from the Minister: is that at the discretion of the commissioner, who in some cases can either request it and it’s got to be agreed to by the commissioner? And I’m talking about the overall commerce commissioner, not the Grocery Commissioner. But just what is the arrangement for when two or more commissioners may be asked to undertake specific roles as set out in clause 163(2) specifically?

Thank you, Madam Chair. The powers of the commission have been pretty well traversed last time we were in committee, but clause 163(2) makes it relatively clear that this is at the request of the Grocery Commissioner, and I wouldn’t want to, in this House, fetter any discretion that the commissioner might have in making the decision of when that’s necessary.

Just to be clear, I think if I just take—reinterpreting what the Minister said: is it correct, my understanding, that if the Grocery Commissioner requests two or more, then the two additional commissioners need to, or have to, be appointed? Or is it also subject to the Commerce Commission commissioner’s approval as well? How is that mechanism triggered?

It’s self-explanatory in clause 163(1)(b). They are two or more other members of the commission. They’re, of course, going to be existing members.

Well, I’m struggling with that. I’m not quite sure that was my question—I know there’s two or more.

Look, we have traversed this, and I’d like to ask the question again, but I don’t think the Minister is going to answer the question. Maybe he doesn’t know the answer, but the final thing—obviously, we debated this bill substantially the last time it was before the House. My final question around this grocery bill—and it was the one I wanted to ask right at the end of the last session—is what assurance can the Minister give the committee that the Grocery Commissioner, who’s in the process of being recruited, will have the requisite skills of really understanding the grocery trade, and we don’t necessarily end up with getting people who, particularly, have a legal background or who may have an economics background, but we actually end up with someone who has a real, in-depth understanding of the grocery trade? Because we’ve made it clear, in our support of this bill, that one of the most critical aspects of this bill is to have the appointment of an appropriate person with the appropriate skills and experience of the grocery trade to make this role meaningful.

We are concerned that we may end up with someone who has a general understanding of the grocery trade and may have specific skills either legally or economically. But, actually, that’s not what our support was predicated on, because we believe that for this role to be effective over time, it requires someone with very detailed working knowledge of the grocery trade. What assurance can the Minister give to the committee that that type of person will be recruited by the Commerce Commission?

Thank you, Madam Chair. I’m very happy to answer these questions. Obviously clause 163, in terms of the powers of the Grocery Commissioner, makes it clear that the Grocery Commissioner may appoint an additional two commissioners, but, of course, “must” if the powers in subclause (2) are being exercised—and they’re set out for Mr Bayly to read. In terms of his advice to me on the appointment of the commissioner, all I can say is that those are things that I’m holding very much in the forefront of my mind and that the appointments process is well progressed, and I can assure him he need have no concerns that the appointment won’t be of a person well-equipped for the role.

Thank you, Madam Chair. I’m just looking at clause 167, “Commission must have regard to economic policies of Government”, and wanting to be quite careful that we don’t end up politicising a Public Service role by putting them through. It notes there that “the commission must have regard to any economic policies of the Government”, so I am just hoping to hear from the Minister around what this may entail and what advice he has sought and received around how that would look. If you could give a couple of practical examples, that would be appreciated. Thank you, Minister.

I’m happy to answer that. It’s not unusual for the Government to make expectations clear to independent entities, and this clause 167 makes it clear exactly how that should happen. For example, it’s a clear Government priority, in the current environment, to have a lowcarbon, highly productive economy, and those kinds of directions could quite easily be given to the Grocery Commissioner to outline the Government’s economic priorities and to make sure that any actions taken by the commissioner are consistent with that.

I asked for a couple of examples there, Madam Chair, and the Minister came back and said, “Oh, you know, high-level, lowcarbon economy” sort of feedback on that. But I’m wondering how that applies to what this is actually about here, which is making sure that the grocery prices that these big supermarkets can charge—and what the New Zealand taxpayer or the New Zealand consumer pays—how that is addressed through that. Because from what I understand, that is what we are trying to address here, right? So to say that the commission will have regard for a low-carbon economy, I’m not really sure that that’s actually addressing what we are trying to address here, which is making sure that New Zealand families aren’t getting fleeced when they go to the supermarket. Thank you.

Well, I’m so glad the Minister actually tried to address my questions because it became illuminating. So from what I understand—I think I’m correct in my interpretation—the Minister just stated that the Grocery Commissioner, which is a warranted position, is able to appoint two additional commissioners. So my question then becomes, because I’ve perhaps had an assumption that he or she—the Grocery Commissioner—may rely on existing commissioners within the Commerce Commission, because there are a number of commissioners. Is it the Minister’s view—and it’s a genuine question—are we talking about the appointment of further commissioners who are not currently existing commissioners of the Commerce Commission, and, if so, is that a new warranted position?

I’ve already answered that question quite clearly; I’d invite Mr Bayly to read the Hansard.

OK. Well, thank you very much for that short and unhelpful reply. I hope, in the spirit of trying to get a good bill—I think the Minister’s showing a great deal of insensitivity and poor order—my next question to the Minister: is he able to provide the committee with some indication of when the Grocery Commissioner might be appointed? Hopefully, the Minister will move and resist the temptation to be rude and insulting to the committee.

I’m still waiting for an adequate response back from the Minister on clause 167 and what some tangible examples would be; I didn’t receive any last time. Thank you.

To Mr Uffindell: I did give him a tangible example of the Government policy, but I won’t presuppose what it will be in the future.

To Mr Bayly: as I said, the appointment of the Grocery Commissioner is well progressed. It, of course, won’t happen before this legislation’s passed.

Thank you. To the Minister: just the way the bill is written, would I be right in saying that the designation should apply to cooperatives only—not, for example, Gilmours, who is a wholesaler—that the supplier obligations would fall on all cooperatives only, not the bits that make it up?

I wonder if the member can state his question again. I couldn’t really hear what he was asking.

It’s just for the Commerce Commission direction. The way the bill is written at the moment, the supplier designation should only apply to cooperatives, and not someone like Gilmours, who’s a wholesaler food service. But the supplier vocations, if correct, should fall on all the cooperatives only, not all the individual bits that make up the supply chain.

My understanding here is that the bill is intended to capture grocery retailers. Gilmours is a wholesaler, and so the main object of this bill is to generate competition in the retail grocery market.

How does the Government believe that a regulator can set and enforce regulated prices across thousands of individual grocery products, many of which will be perishable and of varying quality?

Mr Smith raised this point on a number of occasions in the last sitting of the committee, and there is no proposed price-setting, price-fixing here. There is a regulatory backstop that will be a last resort; it’s highly unlikely.

The question is that the Minister’s amendment to Supplementary Order Paper 353 set out on Supplementary Order Paper 359 be agreed to.

The question is that the Minister’s amendments to Part 5 set out on Supplementary Order Paper 353 as amended be agreed to.