The proposal to forcefully break up the Foodstuff’s grocery chain undermines the foundations of business and private property rights, says the EMA.
“It’s not quite nationalising a private business but it’s too close for comfort,” says the EMA’s Head of Advocacy Alan McDonald.
“And that’s a terrible signal to send when we’re currently trying to attract much-needed international investment through the government’s open-for-business mantra.
“Seeing a right-of-centre, business-focused political party such as National suggest this type of policy will sit uneasily with businesses in New Zealand.
“It might be a populist policy for a grumpy electorate, but that doesn’t make it a good policy.
“Successive governments have tried to encourage a scaled-up, third-party chain into the market and failed, because the scale needed simply wasn’t there,” McDonald says.
Other measures, such as changes to planning laws, have also been introduced to make the emergence of a third chain – either a domestic or international chain – more viable.
Announcing this type of policy before those changes have had time to make a difference simply undermines that earlier intent.
“We also have a grocery commissioner, now folded into the Commerce Commission. A better option might be to find a stronger regulator and give them more teeth to deal with the issues in the sector,” McDonald says.
“The Australian Competition and Consumer Commission (ACCC) has no compunction about stepping into the market and using its market powers to intervene, but we’ve seen nothing like that in New Zealand.
“Forced separation is a step too far.”