This came in the heels of review of major supermarkets’ delisting processes
The Commerce Commission has announced that it has warned Woolworths New Zealand Limited about a potential breach of s 19 of the Grocery Industry Competition Act 2023, relating to its processes for taking products off shelves.
According to the commission’s case register, the likely breach involves failing to inform suppliers of their right to request that the retailer review a delisting decision, a requirement under clause 19(1)(b) of the Grocery Supply Code.
In a news release, the commission noted that only a court could find a breach and that Woolworths has since adjusted its processes to meet its obligations.
The commission’s warning letter followed its investigation of the processes of all major supermarkets for performing range reviews and delisting products to determine their compliance with their obligations under the Grocery Supply Code.
“Range reviews continue to be an area of focus for us at the Commission, with previous and ongoing investigations,” said Dr Alice Hume, the Commerce Commission’s head of groceries, in the news release.
In this investigation, the commission identified and looked into instances in which Woolworths risked breaching its obligations.
In the commission’s news release, Hume emphasised that Woolworths, Foodstuffs North Island, and Foodstuffs South Island held 82 percent of the country’s grocery market and thus served as the primary channel for most suppliers to sell products.
She noted that the possibility of taking products off the shelves could cement the power imbalance between the major supermarkets and smaller suppliers.
Hume added that the risk of losing market access could put smaller suppliers out of business, force them to accept conditions that would not benefit them, and erode trust in the decision-making process of supermarkets for delistings.
She shared that the commission directly heard suppliers’ concerns regarding the major supermarkets’ delisting processes and the resulting power imbalance.
In its news release, the commission explained that the Grocery Supply Code imposes obligations on the major supermarkets when conducting range reviews and determining which products to stock and which to delist.
The commission noted that breaches of the Grocery Supply Code amount to breaches of the Grocery Industry Competition Act.
In the news release, Hume shared that the commission recently reviewed and amended the Grocery Supply Code to safeguard suppliers from retaliation when criticising the major supermarkets’ compliance with the Code.
According to the commission, under the updated process, suppliers have more transparent interactions with the major supermarkets and clearer rights to challenge their delisting decisions.
“The Code plays a crucial role in levelling the playing field between the major supermarkets and smaller suppliers, so we take compliance very seriously,” Hume said in the commission’s news release.
Hume urged suppliers to reach out to the commission with any problems about the major supermarkets’ delisting processes or potentially unfair treatment.
The commission noted that the new Grocery Supply Code would come into force on whichever was later between 1 May 2026 and when the relevant minister revokes or amends either or both of regulations 9 and 10 of the pertinent regulations, which set the penalty level governing violations of the Code.
