More than four years after the Commerce Commission issued a damning stocktake, Foodstuffs and Woolworths still dominate about 82% of New Zealand’s grocery market.

How to drive competition up, and prices down, has now become an election battleground.

National and New Zealand First want structural changes to Foodstuffs. Labour now proposes separating the wholesale and retail operations of both major supermarket groups.

ACT wants planning and regulatory barriers reduced so new competitors can enter. The Greens want to nationalise 120 supermarkets to create a publicly owned chain called KiwiMart.

Although presented as competing answers, these policies target different parts of the grocery system. They may therefore work better in combination than in isolation.

This is where “market-shaping” can be useful. Rather than simply repairing a failed market, this approach involves considering what market a society really wants, and asks which mix of rules, organisations and infrastructure could create it.

As my own research on market-shaping has shown, looking at a whole system can tell us important things about how its parts interact and who holds power.

This thinking may also help New Zealand achieve its goals for a better grocery market – be they affordable prices, genuine choice, reliable nationwide supply or more room for smaller retailers to grow.

Similar goals, different approaches

Last week, National unveiled a plan that would reorganise Foodstuffs into one nationwide Pak'nSave group and a separate New World and Four Square group, with........

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