Details of what supermarkets would have to do to be slapped with $10 million fine 'being carefully worked through' - David Clark

David Clark says the details of a proposed new code of conduct for supermarkets "is being carefully worked through, I assure you" after revelations they could be slapped with fines of up to $10 million for breaches.

Earlier this month Dr Clark, the Commerce and Consumer Affairs Minister, said the Government was establishing a Grocery Commissioner to report on competition in the sector and identify rip-offs. The watchdog would have the ability to issue warnings and fines, the Government said. 

Cabinet documents show huge penalties - among them $10m in fines and profit-based penalties - were being proposed for Foodstuffs and Countdown, New Zealand's two major supermarket chains, should they break a soon-to-be-introduced code of conduct. 

But, speaking with Newshub Nation's Simon Shepherd on Saturday, Dr Clark couldn't reveal what rules supermarkets would have to break to receive such fines - only saying they would have to be "deliberate and repetitive". 

"The detail of all of those kinds of things are being carefully worked through, I can assure you. We've announced that we're going to have a Grocery Commissioner who will have responsibility for the sector - much like the Telecommunications Commissioner currently in place," Dr Clark said.

"We want to make sure there's a robust regime in place. In the UK, they have turnover-based penalties and we think that's well worth digging into."

He also said Foodstuffs and Countdown would be the only two chains named in any initial legislation.

Dr Clark said the new law was designed to apply to the major players, often referred to as the supermarket "duopoly".

A Commerce Commission market study into the grocery sector earlier this year found it wasn't "working well for New Zealand consumers", with smaller retailers unable to compete with the two major players.

The establishment of the Grocery Commissioner and a supermarket code of conduct were both recommendations from the Commerce Commission.

In the interview with Newshub Nation, Dr Clark went on to say the supermarket reforms wouldn't fix New Zealand's cost of living crisis overnight - but the reforms were "part of" helping to ease the burden.

"One of the things we've observed already, interestingly, is that the supermarkets have signed up to a whole lot of things they didn't sign up to before… they've signed up to price rollbacks," he said.

"Now, those are short-term - we're interested in fixing those longer-term - but they've signed up to them.

"The pressure is on them and so that is having an effect already." 

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