Grocery Reform - David Seymour in the Wrong Aisle

Among the chorus of voices applauding the Grocery Commissioner's annual report last week, one lone dissenter stuck out like a packet of cat litter in the deli. ACT leader David Seymour, in an interview with RNZ, rubbished the Commissioner’s seeking of additional powers to respond to this failed market and dismissed its work as “meaningless red tape.”

Thankfully, Seymour’s position is directly at odds with Commerce and Consumer Affairs Minister Andrew Bayly who endorsed the Commission’s conclusions. At odds too, with the overwhelming outpouring of support and interest from politicians, commentators and the public alike.

It must be said that many observers were favourably impressed with Commissioner Pierre van Heerden’s Report, and the conviction with which he presented it in the public arena. Supported by the very relatable Commission Chair Dr John Small, van Heerden came across as a man on top of his job with the energy to drive meaningful progress.

And the common view is that strong action to correct the massive market failure in this crucial sector has the support of five of the six parties in parliament.

So why on earth is ACT an outlier?

Government action to break up a failed market is not a daily occurrence, but there is plenty of precedent. Globally, a Google search on terms like antitrust or the Sherman Act will reveal the history around this. Or check out the famous breakup of Standard Oil a century ago after the Rockefellers bought up practically the whole of the US oil industry and held the whole population of the USA to ransom.

In New Zealand our stand-out example was the progressive action against Telecom through the 2000s, supported by both National and Labour. That led to our enjoying one of the world’s most competitive telecommunications markets. Had that not happened, then today’s Kiwis would be fighting phone and Internet bills at twice today’s prices, punitive surcharges for calls to a different network, and 20th century broadband speeds everywhere except the CBDs. The Commerce Commission was central to that.

So action to respond to market failure is not some kind of communist plot, but a rational resolution to an issue that occasionally breaks a market.

Its puzzling that David Seymour doesn’t get all that. He's an educated guy. The Commission, like its global counterparts, is a referee for the business sector. Its job is to promote competition – not to frustrate it which is what Seymour seems intent on doing. Competition usually works well but, occasionally a big business manipulates itself into a position of so much power that it effectively strangles a vast number of small businesses as well as having extreme market power over consumers.

That needs fixing.

To take the referee off the field as Seymour is propounding feels like putting lazy far-right dogma ahead of pragmatic common sense. It would not work for any economy. Most certainly given New Zealand’s small and isolated situation it would be hugely detrimental to our economy and our society.

None of this would matter were it not for our coalition-based parliament. But despite getting less than nine percent of the vote, ACT appears to have disproportionate political power - it feels like we have an ACT-led government rather than a National-led one. So the possibility of grocery reform being traded off against some coalition concession on another issue – gun control, charter schools or whatever – seems real.

Its time for all Members of Parliament to take a stand. They should put principles ahead of party politics and even coalition agreements. Our Commerce Commissioners are independent – somewhat similar to our judges and police. They need and deserve a degree of respect and support from political leaders as they go about what is often a thankless job.

Our failed grocery market is a national crisis. An increasing number of Kiwis are resorting to bread and jam for dinner. All levels of leadership need to respond with energy, integrity and action.