So its fair enough that the Commerce Commission has opened an inquiry and several suppliers have made statements. But just between you & me, those politicians and suppliers shouldn't get their hopes up. Here's why.
There are three exceptions to this under the Commerce Act.
- If you really face little or no competition (eg power line companies) then you might get regulated under part 4. This isn't a risk for the supermarkets because the Commission is looking for potential anti-competitive conduct not considering price control.
- It is a very serious sin to collude with your rivals and gang up on the consumer - i.e. form a cartel. No suggestion of that here though. This is unilateral conduct by Countdown.
- If your bullying results in a substantial lessening of competition, then you might be in breach of s36. This looks to me like the only possible angle in Countdown's case.
Which is a problem for two reasons. First, s36 is widely viewed as being broken. Whether it really is broken is a subject for another day, but it is noteworthy that the Commerce Commission believes it to be so, and to my knowledge has prosecuted no s36 cases since it came to that view.
But more substantively, how does Countdown's conduct reduce competition? I would expect Countdown to argue that their supermarkets compete with other supermarkets. They don't all stock the same lines, so why is competition lessened if some suppliers don't get shelf space in Countdown?
There could be a plausible argument for why this lessens competition, but its not obvious. At first glance this looks more like your bog standard price gouging, which is perfectly fine under the law.