The other day I happened to be grocery shopping in a nearby supermarket that markets itself on ‘low, low prices’ that ‘save’ the customer money. In the fruit and veggie section they’d piled a fair quantity of telegraph cucumbers which were ‘extra low’. Apparently. Personally I don’t think $4.99 is ‘extra low’, especially when it was half that price last time I was in there.
To me it summed up the whole mind-set of the New Zealand supermarket system. Shoppers are barraged with endless self-descriptions of how ‘savey’ these places are (that’s the actual word one of them uses). This is a flat lie. It’s a duopoly – Foodstuffs and Woolworths NZ – which, in market terms, is no better than a monopoly, and which also has monopoly control of the wholesale network. This gives the lie to the ‘low price’ fiction. The sector as a whole, on investigation, was found to be raking in $1 million in excess profits, daily, from their duopoly, but I’m sure they can justify it. Hey, company directors need their bols and caviar snacks, they need their $1500 chateau briand dinners and their diamond-encrusted Rolls Royces. And if the proles can’t afford to buy food – well, they’ll just have to stop eating. Their fault for being poor, anyway. Well, quite.
Part of the problem is that inflation has taken off, thanks to the complete botch that government and Reserve Bank made of economic policy during lock-down. There is also a supply problem which is both international and not something local businesses can control. And yet food prices are spiralling well over the CPI, compounded by that issue with the structure of the food supply system in New Zealand. It was as much as admitted by the duopoly. Last month, after a Commerce Commission review of the system had lambasted it for pricing food higher than any other country, and for being uncompetitive – and just before government was about to announce remedies – both supermarket companies came up with a ‘price rollback’ that allegedly reduced the cost of key items. You didn’t have to be a rocket scientist to spot the green-wash PR. All that actually happened, as far as I can tell from my household bill – was that everything else was priced up into the stratosphere.
The practical problem is that food – like air and water – is essential to life, and like it or not, government was elected by the people to serve those people, not the profits of big business. When the supply is in the hands of a duopoly that, like all corporates, focuses on profit for its shareholders, the moral onus is on the government to do something practical to address the needs of its constituents. Unfortunately the government report and recommendations didn’t do more than wave a wet bus ticket. The Minister of Commerce and Consumer Affairs threatened to regulate by the end of the year. It’s here: https://www.beehive.govt.nz/release/government-acts-supermarket-duopoly
Did he actually regulate? Of course not. It’s typical of how government behaves these days. We’re two generations into the neo-liberal ‘revolution’ and that r-word is not going to be set up in ways that have any actual effect. You can’t afford to upset ‘thuh markit’, can you? Governments may well be elected by the people, but their sole purpose is, apparently, to serve big business and protect its profits, irrespective of what this does to the electorate.
What worries me is that there is a looming economic storm, globally. It’s already begun slamming house prices down and consumer price inflation up. If people find they can’t afford food – well, history tells me what a hungry population that feels betrayed by their government usually ends up doing. I very much hope it doesn’t come to that. Nor does this mean throwing the capitalist system out. But it is clear that the neo-liberal version of capitalism has wholly failed the average New Zealander when it comes to their food bills. And that government, as usual, has been too gutless to properly deal with the issue.
Copyright © Matthew Wright 2022
2 thoughts on “How supermarkets lie to you”
As you may have heard in the news, the states along the east coast of Australia have just weathered an unprecedented intervention by AEMO, the Australian Energy Market Operator. The reason was because many of the big operators in the electricity grid were gaming the market. Because AEMO had put a cap of $400 on the spiralling energy prices of the so-called market, many of the players decided not to participate and suddenly we had an energy crisis looming just when our states were going through an ‘unprecedented’ [again] cold snap.
Although the government did not actually tell AEMO to bring the hammer down, it approved the action, so intervention is possible. It just depends on how brave the government of the day is. I sincerely hope that the new Labor govt has the guts to put critical reforms in place because they’re sorely needed. I also hope that the massive numbers of Independents force both of the major parties to rethink their assumptions about how much voters will actually endure before they bring out those pitch forks.
As for food, we’re on a fixed income so rising food prices are impossible to ignore. My solution these days is to radically reduce the amount of meat we eat and not to drive unless absolutely necessary. As we’re still self-isolating, the not driving part is fairly easy. Coming up with non-meat meals that are still tasty is a challenge, but probably a healthy one.
Australia now has a bit more competition in the supermarket sphere. We have Coles and Woolworths, the two biggies, then there’s Aldi which is mostly off brand cheap food, and IGA which is better quality but mostly a bit more expensive. As we have a local IGA, I compared some prices and was astounded to find that the items I looked at were actually cheaper than at Woolworths. Those items were on ‘special’ but even so, there is now some genuine competition amongst supermarkets.
Which brings me to the whole paradox of capitalism – it works beautifully, but only while the companies are below a certain size and are forced to actually compete on price, or service, or quality. In neo-liberalism, corporations have become so big that the products they sell are pretty much irrelevant. More importantly, although they pretend to compete, there are so few of them that any competition is purely for show. They set the standard for everything. When a new player comes along with a great product or idea, its snapped up and absorbed so it /can’t/ become a threat to the big corporations.
Like behemoths, those corporations are now so big it would take a concerted global effort to bring them to heel. They really are the existential threat of the modern era.
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Indeed so, the ‘Market of the Beast’.
As regards non-meat meals vegetable curries are good with dhals. And my wife did a simple stir fried nuts and fresh home grown beetroots leaves with some nutmeg I think. It worked very well.
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