Has New Zealand’s supermarket duopoly created higher prices?

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The supermarket sector has become an election issue, and political parties are suggesting everything from government-run supermarkets to breaking up Foodstuffs in an attempt to create more competition.

New Zealand has high levels of concentration in the grocery sector. The two main supermarket chains hold 82 percent of the market, down only slightly from 84 percent in 2020 despite ongoing attention.

The Commerce Commission has highlighted that New Zealand supermarkets also appear to have high margins compared to those in other countries.

In its most recent grocery report, it noted Foodstuffs North and South Islands had EBIT margins of more than 6 percent, second-highest in its global comparison and ahead of Coles, Walmart, Tesco, Sainsbury and Carrefour.