Supermarket mark-up on Kiwi staples surprising

The Green Party has renewed calls for a Commerce Commission investigation into supermarket pricing practises and has revealed the large mark ups that supermarkets have placed on two Kiwi staples.

“Information provided to us from an industry insider shows that in April this year consumers were being charged a mark up of 195 percent on kumara and 286 percent on pumpkin in some supermarkets.

“Obviously the supermarket has to pay costs such as marketing, transportation, wages and power. Even so, I find it difficult to see how the growers and the consumers are getting a fair deal,” Ms Kedgley says.

“In these cases both items had long shelf lives so there would be little spoilage. The growers were being paid a wholesale price of $2.03 per kilogram for kumara, which one supermarket on-sold for $5.98/kg.

Pumpkin growers were paid just 51 cents per kilogram, while the supermarkets sold them for almost $2 per kilogram.”

The Green Party would like to see an investigation into grocery prices and the impact of having two major big players who account for 95 percent of the market.

The Australian Competition and Consumer Commission is currently carrying out such an investigation across the Tasman, where the supermarket duopoly controls 80 percent of the market.

The Green Party also wants to see a code of conduct for supermarkets developed, such as exists in the United Kingdom, to ensure growers and consumers are treated fairly.

When asked about a New Zealand inquiry today in the House, Commerce Minister Lianne Dalziel, did not rule it out, but said she would wait till the publication of the Australian report at the end of July.

April 2008 Kumara Markup Pumpkin Markup
Store (Per kg) Store (Per kg)
Countdown $4.98 145.93% Countdown $1.97 283.06%
New World $4.49 121.73% New World $1.89 267.50%
Foodtown $5.98 195.31% Foodtown $1.99 286.94%
Pak ‘n Save $3.99 97.04% Pak N' Save $1.99 286.94%

Wholesale/kg $2.03 Wholesale/kg $0.51