Labour says it will directly support companies wanting to enter the New Zealand grocery market in a bid to break up the supermarket duopoly. 

The announcement comes as the newly-appointed Grocery Commissioner investigates cereal company Sanitarium after it refused to supply Weet-Bix to The Warehouse, citing supply issues, while continuing its supply to the major supermarkets. 

Labour’s commerce and consumer affairs spokesman Duncan Webb said if re-elected its support for new companies could include finance, making sure land was available, regulatory changes, incubating innovation and accelerating competition. 

Webb said the behaviour by Sanitarium highlighted why the existing players could not be trusted to sort the market out. 

“It refused to supply Weet-Bix to the retailer selling it cheapest – grocery challenger The Warehouse – citing supply shortages. Those claimed shortages don’t appear to be affecting supplies to the big supermarkets.” 

The Warehouse chief executive Nick Grayston previously told BusinessDesk the retailer has been cut off from its supply of Sanitarium’s Weet-Bix, and it’s a sign of the supermarket duopoly getting what it wants. 

The giant health food brand, which operates as a charity and is wholly owned by the Seventh-day Adventist Church, told The Warehouse several weeks ago it would stop supplying it with Weet-Bix – which it has been selling since 2021 – because of a shortage of the product. 

Grayston said the move was “directly contrary” to the intent of the Government in terms of equitable access to groceries and Sanitarium should have dealt with the shortage by “rationing” Weet-Bix to its customers, which include supermarket giants such as Foodstuffs and Woolworths. 

“We don’t think that it’s fair that they’ve chosen to deal with that by cutting us off completely, rather than rationing everyone,” Grayston told BusinessDesk. 

The Commerce Commission, which covers the new Grocery Commisisoner, has requested information from Sanitarium to explain its actions. 

A Labour Government inquiry into competition in the grocery business showed the two big companies that control the grocery industry in New Zealand were making excess profits of around $1 million a day. 

Following the inquiry Labour established a Grocery Code of Conduct, appointed a commissioner, banned restrictive land agreements that locked new entrants out of locations for new supermarkets, made unit pricing mandatory and required major grocery retailers to open wholesale offerings.