Give the CERA job to TESCO

copyright Guardian

copyright Guardian

Where is the ‘fine line’ then? The supermarket industry’s Rubicon? Tesco already sells anything from Life Insurance for your pets and travel to distant shores to party services. By the way, you can get your groceries there as well, including fresh produce…. In future though, starting in South London by the looks of things, shoppers will be able to just pop down from their high-rise flat to their local Tesco store on the ground floor…their Tesco flat that is in the apartment building Tesco has built!

The days when supermarkets just focused on selling FMCG products to willing buyers and saw their place in the supply chain as connecting manufacturers and shoppers are long gone and nowhere is that more obvious than in the UK. For the last 20 years, UK supermarkets have been depicted as the bad boys on the block for developing standalone stores and shopping centres at the outskirts of towns and therefore deconstructing High Streets. High Street now becomes a very viable proposition for smaller format food stores run by supermarket chains and, hey…if there is some urban development that can go with it, the much the better.

We have a whole city that needs redeveloping…may be we should sack the Canterbury Earthquake Recovery Authority and invite Tesco to have a go?  Can’t be any worse by the looks of things.

Meantime back here in New Zealand politics, the Labour Party Leader Selection Carousel has started to spin and Shane Jones, the contender least likely to be successful, stated on national television that supermarkets are akin to ‘brown shirts’ and needed regulating. His point being that a duopoly as exists between Countdown and PAK”n SAVE /New World does not provide sufficient competition to keep food prices affordable.

He has a point about duopolies – but only up to a point! We have three limitations in this country which are underlying factors of the duopoly situation that has evolved over the decades – because our food retail industry sure did not start as a duopoly operator.

Firstly, we are a nation with 4.5 million inhabitants which does not give us critical mass in any way, shape or form. Secondly, one-third of New Zealanders are akin to a giant Gannet colony, squeezed together in the Greater Auckland area. This means our lack of critical mass is enhanced further in a negative sense. Thirdly, as a food exporter, our domestic price structure for meat, dairy and fish is linked to what we can achieve for our goods on the global market.

You can’t just regulate that, get real, Jonesy. Your Leader before the one trying to sell snapper in Parliament was bad enough when he wanted to upset the simplest and most effective GST system in the world by making fruit & vegetables GST exempt. The chaos that would have caused is nothing compared to what would happen if you attempted to regulate supermarkets.

All this suggests to me that there is money to be made with an inoculation system for wannabe party leaders which ensures they are administered a healthy dose of economic realism before they wander off and make rash promises in order to be elected.

I wonder whether I could obtain a grant for the necessary research from the Minister of Everything?