John MacDonald: $10M fines will sort out the supermarkets. As if

Canterbury Mornings with John MacDonald

The Commerce Commission says the big supermarket operators are still creaming it.

They’re not making the changes the Commission wanted them to make. Their profits are still too high and the Commission is talking tough, saying it would like to be able to fine them up to $10 million if they keep ripping people off and ignoring what the Commission wants.

But I don’t think that $10 million fines would make the least bit of difference. Because we’re talking here about a sector worth $25 billion, do you really think they’re going to worry about the risk of a $10 million fine?

Of course they’re not. They’d just be like the garden shops that open up shop on public holidays. It’s against the rules. They know they might be fined, but they run the risk, anyway because they make way more than enough to cover any potential fine and then some.

And the supermarket companies are the same. They haven’t worried about the Commerce Commision up until now —which has been demanding all sorts of changes on behalf of us consumers— and they won’t be any more worried about the Commerce Commission today than they were before it came out with its latest assessment of the supermarket sector.

These companies know they have it over us. What’s more, can you imagine how long it would take to actually prove a case of price-gouging or whatever against these outfits?

And while that was all going on, they’d just keep hiking up the prices and “ripping us off” - as the Commission put it yesterday.

Actually, it was the Commerce Commission’s grocery commissioner, Pierre van Heerden, who said that. It’s him doing the tough talking. Which is about time because, until now, he’s been all ‘measured tones’ on it. But yesterday, he put his serious face on. And good on him.

But it’s going to take a lot more than him putting on his serious face for the supermarket operators to pay any attention.

On paper anyway, it is an absolute rort that the prices we pay at the supermarket have been going up at a faster rate than increases in what the supermarkets pay their suppliers. That’s the nub of what the Commerce Commission is saying.

Which makes a complete joke of the lines supermarkets like to use about “passing on the savings to you”.

As far as the Commerce Commission and the Grocery Commissioner are concerned, the supermarkets haven’t been doing that at all. They’ve been screwing their suppliers —getting their prices down— but they certainly haven’t been passing them on.

Where I’m torn in all this is that I know supermarkets are businesses. They have to make profits to survive. They’re not charities.

Even though they provide some of the essentials of life, they’re not charities. They exist to make money and they’re doing that.

For a long time now, owning a local supermarket has been seen as a licence to make money. It’s not easy. And I know with the likes of Foodstuffs, at least, you can’t just walk in and take over a supermarket. Even if you’ve got the money to buy one, you have to do your time working in a supermarket - getting a real understanding of how they work.

Nevertheless, people have made good livings out of it. But it’s only in recent years that us customers have looked up and thought, hold on a minute, when it seems that we go through the checkout and it gets more expensive every time.

So yes, a supermarket is a business which needs to be profitable. And yes, I’m torn when it comes to punishing businesses for being successful. For being profitable.

But when a business does that in an underhanded way - that’s where I draw the line. And, like the Commerce Commission and the Grocery Commissioner, I think supermarkets have been underhanded, especially when you consider the fact that the prices we pay at the check-out have been going up at a faster rate than increases in what the supermarkets pay their suppliers.

That’s underhanded, and good on the grocery commissioner for calling them out.

But I don’t think the supermarket companies will care and I certainly don’t think the threat of $10 million fines will make any difference, either.

See omnystudio.com/listener for privacy information.