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Well-known tea and coffee people meet up for special visit to new Auckland facilitiesSIXTEEN PEOPLE who have been involved in the tea industry in this country for, in some cases, over 40 years, were invited by the Bell Tea & Coffee Company last month to tour its new head office in Crooks Road on Auckland’s Hig ... Read More

Dec / Jan issue out now!!

IT’S WHAT you hear outside the formal part of conferences that is always the more interesting.

Delegates at the recent annual conference of the New Zealand Food & Grocery Council in Australia, were pretty convinced  that what we are currently seeing in the grocery industry is not going to last.

We are, of course, referring to the balance of market share between the two retailers – Progressive Enterprises and Foodstuffs.

PEL has been in array for some years with little investment from previous owners FAL and it is taking new owners Woolworths time to catch up because, as we all know, Rome was not built in a day.

PEL says it will be all Countdown in five years – with the exception of the franchise group. During the course of that period it would not be surprising to see its market share rising.

Many delegates expect to see this happening and believe Foodstuffs is currently enjoying a “honeymoon period” which will not last.

The other factor coming into the equation which cannot be ignored is that the OECD has revealed that this country has experienced the biggest growth in food prices in the world. This can be explained away to some extent by the falling dollar over the last year, which has now turned round and is on the way up again. But these rises and falls tend to even themselves out when it comes to ingredients costs.

New Zealand cannot really be compared to Australia, Britain and the rest of Europe and the United States because our population is tiny compared to those countries.

This means there is limited scope for competition in grocery. We did have three players until Woolworths New Zealand was swallowed up by PEL and The Warehouse entered the fray only to discover that it’s hard to make a dollar when you have so few stores in comparison to the competition.

The Competition Commission decided it was OK to have just two retail groups when it allowed the Woolworths acquisition and this is the outcome.

The Government is never going to subsidise food in our supermarkets and the only way the scales are ever likely to change is if there was a third player. Aldi has been tipped in this respect and would make a difference with its low pricing strategy, but that’s not going to happen in the foreseeable future.

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In My Kitchen

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