RODNEY HIDE: KiwiMart — The Great Leap Forward

The Greens have a plan for cheaper groceries. It’s called KiwiMart. Force Foodstuffs and Woolworths to sell 120 stores and a couple of warehouses into state ownership at a heavy discount, splash about $2.8 billion, ban “price gouging,” and — abracadabra — milk is affordable.

Competition, they say. Owned by all New Zealanders, for all New Zealanders. The slogan writes itself. So does the sequel.

Year 1. KiwiMart opens with a mandate to prioritise affordability. Prices are lower because the Cabinet said so. Shoppers cheer. The private chains, short 120 stores, and a few billion, and staring at a price-gouging ban, stop discounting specials that used to pull people in. Margins migrate somewhere the press release didn’t mention.

Year 2. KiwiMart is short of butter. And fruit. And truck drivers who will work Sunday for a state rate. The minister explains that suppliers are “not playing ball.” A temporary wholesale price schedule appears. Just until the shelves look decent for the cameras.

Year 3. Farmers discover the schedule. Milk solids somehow cost more to produce than KiwiMart may legally pay. A few herds go to the works. The Greens discover “food security.” Export controls on meat and dairy are floated so New Zealanders eat first. The Chinese buyer rings someone else.

Year 4. Freight is the bottleneck. “Excess profits” in trucking. Fuel, tyres, drivers — another gouging ban, another schedule. The queue at the distribution centre becomes a moral issue. A People’s Logistics Agency is temporary, of course.

Year 5. Urban gardens and community food hubs can’t fill the gap the price system used to fill in an afternoon. The school lunch programme expands again — not because kids were hungry for lack of compassion, but because the shop is unreliable. What began as a third competitor is now a rationing system with better branding.

Year 7. We have a Lettuce Board. Or a Kai Commissioner. Or both. Nobody remembers wanting either. Each failure proved the last lever wasn’t big enough. Nobody votes to collectivise the country. They just refuse to admit the first lever was wrong.

Supermarkets in New Zealand are incredibly successful at providing us what we want at a price we are prepared to pay. When I was a kid, oranges and bananas were a Christmas stocking treat. My kids have them sitting in the bowl everyday. There’s a real argument about competition law: planning rules, that’s the choke, and how hard it is for a third chain to get a site. Forcing the taxpayer to buy the aisles and then capping the prices is not competition. It’s central planning without the loyalty card.

If prices are a signal, smothering them doesn’t make food cheaper. It makes food scarce, then political. The next intervention is always “just this once.” Then it’s the farms. Then the trucks. Then the board.

KiwiMart isn’t the end of the story. It’s chapter one. It’s not like it hasn’t been tried before.

Rodney Hide is a former Minister and ACT Party leader