Harsh land and investment laws will prevent new supermarket entrants

Submitting to the select committee hearing on the Grocery Industry Competition Bill last week, the Initiative’s chief economist Dr Eric Crampton says there are too many barriers to entry.

“Zoning makes it hard to find places where new supermarkets might be allowed; consenting can add years of delay before anything is opened; and, the Overseas Investment Office adds its own layer of complexity and uncertainty.

Suppose the agent for Aldi, or Lidl, or Tesco, was considering the New Zealand market and the Government claims the local supermarkets are extraordinarily profitable. Why not enter?”

Campton says any of the overseas supermarket chains will need to find a set of sites where council zoning allows supermarkets.