Press Statement: Government fast‑tracks supermarket entry in line with NZI blueprint
Wellington (Wednesday, 27 August 2025) – The Government’s supermarket package adopts the right strategy for competition – remove barriers to entry and open the door to investment.
That is the core approach The New Zealand Initiative has championed for years, including in a May 2025 research note, A Fast-Track Supermarket Entry and Expansion Omnibus Bill, setting out a rules‑based alternative focused on planning, consenting and overseas investment. We shared it with Ministers, then released it publicly.
The backbone of the proposed package aligns closely with the Initiative’s recommendations.
The Government noted restrictive zoning, long consenting and site scarcity have posed substantial barriers.
The Initiative previously proposed a grocery-competition‑focused fast‑track that bundles multi‑site rezoning and consents, integrates Overseas Investment decisions, and adds independent economic expertise to panels – all with targeted overrides of planning gatekeeping that frustrates entry.
The Government’s package tracks this direction. It recognises competition as a public interest in consenting, creates national‑level certainty for building approvals, and signals an open posture to foreign investment. Those are the levers that matter most for market entry at scale.
“The Government has chosen the right lever – enable entry rather than try to design the market,” said Dr Eric Crampton, Chief Economist at The New Zealand Initiative. “Lowering barriers is how we discover whether incumbents have been underperforming or overpricing: if they have been, a new entrant can eat their lunch while bringing us better lunches at lower prices.”
“This is very close to the architecture we set out in May,” said Dr Benno Blaschke, author of the Initiative’s research note. “The pro‑competition fast‑track, a single consenting playbook, streamlined building consent and a clear OIA pathway create favourable conditions for credible entrants to scale. That is the heart of the reform.”
Cautions and next steps
We remain concerned about structural remedies. Forced divestments or separations would be heavy‑handed and can deter investment. Simplifying new entry is the better solution.
We are also yet to be convinced by supplementary fair-trading changes and the proposed predatory pricing test. The government hopes incumbents will reduce prices if a Costco opens next door but warns that reducing prices by too much will lead to prosecution under a new and untested legal regime.
During the market study process and subsequently, the Initiative argued that zoning and consenting processes have created substantial barriers to entry. We strongly welcome the easing of those barriers.
Notes for editors
- Government fast‑track changes will make competition a factor for decision makers, with a typical consent achievable in well under a year. The package also establishes a single building consent authority, removes key restrictions for pre-approved designs, and clarifies OIA pathways for grocery investment.
- RFI feedback highlighted restrictive zoning, long consenting and labelling hurdles. Average resource consenting is about 18 months and $1 million, with examples of four years and more than $3 million. The two major retailers hold about 82 percent share.
- The Initiative’s research note proposes a Competitive Streamlined Planning Process with bundled multi‑site rezoning and consents, integrated OIA approvals and an independent economist on panels, plus statutory overrides of centres‑hierarchy and transport gatekeeping. See the framework summary and the process diagram on page 8.
ENDS
Dr Eric Crampton and Dr Benno Blaschke are available for comment. To schedule an interview, please contact:
Jamuel Enriquez, Marketing and Communications Manager
E: jamuel.enriquez@nzinitiative.org.nz
P: 021 022 34451
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About The New Zealand Initiative
The New Zealand Initiative is an evidence-based think tank and research institute contributing to public policy discussion.
Supported by the nation’s leading visionaries, business leaders and political thinkers, we are committed to making New Zealand a better country for all its citizens with a world-class education system, affordable housing, a healthy environment, sound public finances and a stable currency.
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