With ongoing cost of living pressures, the Australian and New Zealand supermarket sectors are attracting renewed political attention on both sides of the Tasman.

Allegations of price gouging have become a political issue in the Australian federal election. At the same time, the New Zealand government has announced that “all options” are on the table to address a lack of competition in the sector – including possible breakup of the existing players.

But it is not clear breaking up the supermarkets or other government interventions will improve the sector for shoppers and suppliers.

In 2022, I co-authored a government-commissioned analysis looking at whether New Zealand’s two main supermarket groups should be forced to sell some of their stores to create a third competing chain.

We found it was possible under some scenarios that breakup could benefit consumers. But key uncertainties and implementation risks meant consumers could lose overall.

A lot hinges on whether breakup causes supermarkets’ input costs to rise or product variety to fall. Even in more........

© The Conversation