The Commerce Commission said suppliers fear speaking out about supermarket mistreatment, prompting an anonymous survey to gather their experiences.
ComCom’s inaugural 2024 survey showed suppliers felt they had little power to negotiate with the major supermarkets.
“If you think about the dominance of the supermarkets, they’ve got 80% of the market,” Commerce Commission head of groceries Alice Hume said.
“If you’re a supplier, and if you’re only dealing with one or two of them, that could be most of your business that’s on the line, so … it is a real valid concern for suppliers.”
Hume noted that rules existed to tackle the power imbalance. However, it is still necessary to identify the factors which suppliers are really concerned about.
Hume said the 2024 survey highlighted concerns over “delisting”—supermarkets’ decisions to remove products from shelves.
She said the Grocery Supply Code, which regulates supplier-supermarket negotiations, now requires supermarkets to be transparent about delisting.
Suppliers can now appeal via an independent dispute resolution service.
The survey will enable the Commerce Commission to pinpoint the key issues requiring its attention.
Meanwhile, Rod Gibson, Woolworths NZ’s commercial director, said the company has observed no evidence of suppliers fearing direct communication.
“Woolworths NZ works hard on ensuring we have good, transparent relationships with our suppliers,” he said.
“We welcome engagement with them, and we encourage open discussion and dialogue.”
Gibson pointed out that the 2024 survey rated Woolworths as the easiest supermarket for suppliers to work with.
Stefan Herrick, Foodstuffs’ head of external communications, said the North and South Island co-operatives treat all suppliers with respect.
“Commercial discussions can sometimes feel intense, so we encourage suppliers to raise any concerns directly with their category manager or other members of our merchandise team.
“We also run regular updates and Q&A sessions, with hundreds of suppliers joining each month to share feedback and stay informed.”
“Surveys like this provide valuable insights into how we can continually strengthen our relationships and ensure fair, transparent, and productive partnerships and, hopefully, deliver benefit to consumers.”