Grant says National is sacrificing property rights to give shoppers a villain

Summarised by Centrist

Damien Grant argues National’s proposed supermarket break-up scapegoats grocery retailers for high food prices while abandoning the property rights and entrepreneurial principles Nicola Willis once championed.

Writing in Stuff, Grant challenges the claim that supermarket greed explains expensive groceries.

“We are in the ferment of a hysteria,” he writes, arguing that structural barriers to commerce are being overlooked in favour of blaming “the avarice of a few”.

He points to the Commerce Commission’s 2022 finding that major retailers’ profit-to-sales margins were “broadly consistent with those of a sample of overseas grocery retailers”. The commission cautioned, however, that it placed little weight on that comparison without detailed examination of overseas operating conditions.

Grant argues the commission’s estimated $420 million in excess profits depended on contestable assumptions about the cost of capital. He cites Woolworths’ $1.6 billion write-down of its New Zealand business in 2024 and earnings before interest and tax of $108 million on roughly $8 billion in revenue as evidence against the profiteering narrative.

“National is willing to sacrifice the property rights of a group of citizens subject to vilification on flimsy evidence because it is politically convenient to do so.”

He nevertheless acknowledges limits to his criticism: “This policy is measured.” It requires Commerce Commission approval, and affected owners would be compensated.

His remaining concern is the investment signal. Grant argues political hostility towards existing supermarket owners could deter the new entrants needed to strengthen competition.

“What the public want is a villain. Willis and Luxon have now delivered one.”

Read more at Stuff

Re-published from the Centrist with permission

Original article at The Centrist