Supermarkets make a killing while price of food skyrockets
There has been a bit of noise made recently on the revelations that the two main supermarket chains in Aotearoa have been raising the price of some produce up to 500% from what is purchased from suppliers. There have been calls from the Green Party that a code of conduct be introduced to ensure these suppliers are treated fairly.
The Greens conducted a survey of suppliers outlining the effects of farmers;
* Fruit and vegetable growers said supermarkets sold produce mostly for 100 per cent-200 per cent more than what they paid for them.
* 18 per cent of growers said prices "often" only just met, or fell short, of production costs.
* 23 per cent said they only "occasionally" made a profit.
Whats is missing from the current discussion in the mainstream press is the impact such profiteering has in a time of recession. This combined with the raise of the GST on consumer goods creates an unnecessary burden on communities least able to pay. Although not the only place to buy fresh produce, supermarkets are often the most accessible option. The supermarket duopoly in this country is acting as an excessively expensive middle man between producers and consumers.
No GST on Food! | Green Party on code of conduct | Farmers Markets in Aotearoa
According to the OECD, grocery prices have risen 42 per cent in New Zealand in the past decade, while those in Australia, also has a market dominated by two chains, have risen 41 per cent. By comparison countries with more competition, like Britain and the United States, have experienced more moderate rates of grocery price rises.
The supermarket system is a grossly inefficient and expensive means of distributing food and ideally, doesn't need to exist. Supporting farmers markets, small scale produce shops or growing your own where possible is a more sensible option for people looking to cut back their food bill.
In the meantime, Progressive Enterprises and the Pak n Save brand of supermarkets should be prevented from profiteering, and the government should remove GST from food and other essential goods and services.
Comments
Utterly Outrageous!
It is terribly appalling what this duopoly does! They are one of the biggest highway men around. Fortunately for us we can grow most of our own vegetables and fruit on a farm where we look after rescued abused animals. However, we know others can’t do this because they don’t have the resources but there are alternatives to shopping at this duopoly or if you don’t have enough property to grow your own. That is buying some of the food directly from the growers like at a farmers’ market http://www.lyttelton.net.nz/lfm/ or by roadside stalls http://roadsidestalls.com/ . We certainly hope the Green Party’s plan works to drop GST on these products but since they are in opposition we suspect it won’t happen and they are only making a noise, so nobody will forget them. Disappointing we know but let's hope common sense prevails.
Wellington markets.
Thanks, R&P. For those in Wellington:
Wellington markets, courtesy of Wotzon.
Prices at the Willis St market on Sunday are sometimes less than half super-market prices. Take a large cloth bag and $40. That'll buy a week's worth of fruit and vegetables for four people.
Expensive lentils.
This looks like it could be a problem. It should be investigated.
I suspect the source is lack of competition in the wholesale and retail markets. The supermarket duopoly (I assume) have a disproportionate level of bargaining power against the disparate smaller scale growers in the wholesale market. This allows them to screw down purchasing prices beyond the level that a healthy market would allow. Similarly, lack of competition between the players in the supermarket duopoly in the retail market allows them to retain artificially high margins, screwing the consumer.
There are a couple of things that we can do to help correct this problem now.
If the political will exists we may see longer term solutions that could involve collective negotiations between growers and supermarkets, and margin controls on supermarket pricing. Alternatively, we might see more market based approaches of promoting patronage of small local grocers and weekend markets, or direct purchasing from the grower. But if we don't push for it, we won't get it. So go to it.
go away you fool!
True grass roots revolution should start at grass roots
This can be debated back and forth. I have lived on different countries, and when it comes to grocery prices NZ is definitely not really that cheap at all. So we need to look at the situation from a more radical perspective than some may be prepared to.
Who owns the land? Who controls the land? Who was it stolen of? Who has a right to the land? Who has and may have a right to the fruits of the land?
The land in Aotearoa NZ once belonged undisputably to the original migrants to this country that is Tangata Whenua. The people of the land have been cheated and robbed of the land over decades. Now at least some compensation is being offered, but sadly it tends to end up under so-called "Corporate Maori" control.
Apart from this issue we are all faced with daily survival. We are either landless or have perhaps mortgage dependent freehold or other forms of land ownership.
Whatever, most of us live in accommodation where some land is underneath and or attached to the property.
As true revolutionaries we should not even be too concerned about the ownership issue, but given the sensitivities involved it may pay to try and "negotiate" with the owners if you do not own the land.
Many landlords would actually be happy to allow some use of the garden or rest of the grounds by tenants, because this improves the looks and general condition of the property. They of course have their own interest on their minds. Put that beside for a moment. Given the capitalist system we for now have to live under it pays to fathom the possibility to negotiate with a landlord the use of some of the grounds. Some will have no problem. Ensure that your interests are met so that you stress the better maintenance, looks and improvements, so that no argument for a rent increase is given. Even perhaps try to argue that you enhance the property, so that perhaps a reduction of rent should be considered.
As due to negative experiences both ways many landlords are locked into negative contractual ties, some at least will be happy to have tenants approach them this way. Never forget to get things in writing and cover your backside and interests though.
Use the bloody land, get sees, cultivate the land, put in fertiliser and bloody well grown your own vegetables and more!
If this gets done collectively, which some boroughs or councils even offer and allow now (lease of commonly used land), then the benefit may be even greater. I harvested buckets of tomatoes last summer. My landlady is offering me comparatively cheap rent and is happy that someone uses the grounds constructively and keeps it clean. It works both ways.
So some things can be done. Do not make yourselves dependent on the duopoly. There are also many cheaper small vegetable and fruit shops all over Auckland. Whether Chinese, Korean, Indian or otherwise owned, there are of course the now popular farmers markets, where you get goods straight from the grower, and so forth.
I admit that in many countries I have been to the grocery prices in supermarkets are lower than here. The cheapest I found was like Aldi in Germany, where you could buy good average wine at Euros 1.30 a 750 ml bottle any time, where cans of beer would cost as little as 30 Euro Cents, where vegetables were often only 2 thirds or half the price as here, where you could buy NZ Kiwifruit for a fraction of what you pay here, and where most processed foods were only little more than half of what we pay here.
All this comes at a price though. Aldi offers good wages, but on the other hand the staff have to work hard and efficiently. So there is no person filling your bags at the end of the check-out, no special treatment, no fancy advertising and no shiny floors and fancy displays.
Even many retailers in most European and North American countries that do not reduce services to that offer cheaper prices anyway.
It pays to examine and test the reasons for this. I am sure there is a downside, but before we all complain, consider all the alternatives and put up your opinions here.
This is a good opportunity
This is a good opportunity for people to make the break from life dependency on industrially manufactured vegetables. A simple shade box for winter veg, and an open raised garden box for summer veg is enough to see a family or individuals through a year of their vegetable needs. Cost? Under half the cost of an xbox or playstation.
Setup cost, seeds, scap bits of wood for the beds, a hammer, nails and some compost. Ongoing cost, water, sunlight and mulch. Grow grow grow until you are harvesting enough to never buy industrialised veges again.
Grow your own is best!
Yes, we think growing your own food is the best option as last time we brought anything from a duopoly shop we felt ripped off and taken advantaged of. However, we know there are some who can't grow there own because they are living in apartments/flats or of their ill health, so other options are buying your food from a smaller outlet like http://www.funkyp.co.nz/ , a local green grocer http://en.wikipedia.org/wiki/Green_grocer , a farmers’ market or direct from a grower from a roadside store - instead of the duopoly. Thus, don't be conditioned into believing the duopoly is all there is for food servicing because they are highway people.
Grow your own food in flower boxes
We hope we haven’t affronted growyourown as they are correct: anyone who lives in an apartment or flat can still use “flower boxes” http://www.howtoadvice.com/FlowerBoxes to grow vegetables in. (Growing them also helps to offset our species carbon emissions and produces oxygen for us and our animal buddies to breathe since every little bit helps.)
No affront received, in fact
No affront received, in fact I compliment you on your elaboration on the issues of urban gardening restrictions. I think it is imperative that people again learn to grow their own food before industrial food prices skyrocket out of control as the country shifts into the second phase of its economic collapse.
Glad
We’re pleased we didn’t cause you offence growyourown and thanks. We believe you are spot on!
GST off food . . .
. . . is a silly and unworkable idea. When National politicians say it is unworkable and will cost more than it saves, they're almost certainly telling the truth. How could you possibly set up a viable system to calculate it?
1. The farmer sells some vegetables to a supermarket. (Ignore middle people involved because supermarkets usually go direct to the grower.)
Let's say an item is sold to the supermarket for $1.00 and given the mark-ups that prompted this thread, assume the supermarket sells it to the shopper at $5.00. What does the $1.00 represent? How much of it is food?
Part of it is a loan repayment to the bank, so no GST there. Part of it is fertiliser, organic or conventional. Should there be GST on the fertiliser? What if some of the fertiliser is used on non-food crops? Does animal feed count? If the farmer is growing feed for sheep, how much GST is there on that, because the sheep produces milk (for a boutique cheese maybe), meat and wool, but there's GST on wool.
The farmer needs to pay for fuel for the farm machinery and vehicles. Should there be an exemption on the GST on that component of the $1.00? How does anyone know how much of the fuel was used in the process of growing and transporting food? What if the farmer combined transporting food with another task, maybe work related, maybe taking the kids to their ballet lesson? Add in electricity, business phone, insurance, rates, all of which incur GST.
Then the supermarket buys the product and the whole process starts over again. How much of the supermarket's power bill is attributable to food? Even the coolers and freezers may not be completely devoted to food. After all, does pet food count?
If it was decided to only deduct the GST on the directly "food" related bit, by the time the administration of it was factored in, there'd probably be no savings at all.
In which case everyone from farmer, seed grower, transport company to supermarket will be claiming maximum "food" percentages in everything they do. Every trip from the farm, for whatever reason, will involve "transporting food". Every part of every supermarket will contain food. Packaging companies will produce packaging that is "edible". Maybe that would be good for the environment but maybe it wouldn't, if it took more energy and no one was really going to eat it anyway. And anyway, maybe food packaging would be exempt from GST. And I haven't even started on the even sillier call for GST off "healthy" food, whatever that's supposed to mean.
So the simplest solution would be to say no GST on the entire cost, whether it was food related or not. But that would be no better. Because what you'd really be doing is saying that companies involved in food production don't have to pay GST, but people involved in other useful and necessary production do. It would be a huge tax burden lifted for some but not for others. If I grow a crop for food I pay no GST but if I grow the same crop for an important industrial use, I do pay GST.
What about edible underwear? Are they food? Flavoured condoms?
Why should luxury foods like truffles (the mushroom, not the sweet) be exempt from GST while dishwashing liquid, childrens clothes and other essentials are still taxed.
So no GST on food is a ridiculous suggestion. Better to campaign for no GST at all. At least that has the merit of encouraging people to start thinking about the whole nature of tax and issues like why the ruling class might like the idea of shifting tax away from income and onto consumption.
Cheers,
John
You can pick things to pieces and then nothing makes sense
There are numerous countries where they have 2 levels of GST, VAT or whatever you may call it. Of course this argument you deliver is nothing new at all. Yet it works in many countries (including many in Europe, the UK, Australia and so forth). Certainly you need to set clear rules, and some will always argue about the sense of including and excluding certain items. Accountants will simply need to adjust the systems they work with to account for 2 rates of GST. That is only a systemic software and procedural challenge easily tackled.
As for your argument to abolish GST - I have a little problem with that. Maybe it makes sense to abolish GST, but what about certain luxury products, which again you may argue are not "luxury" for some? Yet if we abolish GST we need to look at another kind of tax to put on non-essentials, on luxury goods, on possibly environmentally wasteful goods and services and the likes.
Then again we have to decide what is included or excluded.
The argument it would cost more is simply a cheap cop-out argument by the very politicians that want to keep GST simple and in place, so they can continue to levy consumption we all have to engage in. It is the easiest and most fool proof tax that can be charged! That is why they love it so much.
The rich are on their side, because the more the bottom income groups and consumers get taxed, the more they can claim to get "rewards" in the form of tax cuts, like this government has recently brought in.
Only the big earners will gain though. It is a lot of trickery involved, the smoke screen is erected and dumb voters fall for the cheap promises that are never kept. They give a little with one hand and take the more with the other. That is the truth of this government.
We already have quite a sizable shadow economy and black market for many common goods and services. It will thrive even more in future, I am absolutely sure. Bring in some more restrictions for beneficiaries and we will have a real boom of shadow economy activities and sadly also crime.
So thanks for your comments, some of them are considerable, but I argue that we still can implement a 2 level GST or replace GST with some other more sensible taxes.
Why bother though?
"I argue that we still can implement a 2 level GST..."
You go by the nom de plume 'Radical', so why advocate for such a lame reformist idea? Sure, they have the nightmarish VAT in England, with variable rates of tax, but it's hardly anything to aspire to is it? I'd rather work towards a real revolutionary change, so that means pushing for things that move people forward and demand things that are perfectly logical, but which capitalism doesn't want to concede.
I'm not sure that you can claim that the voters are "dumb". They are the people who will ultimately transform society (although probably not through voting). I don't think they believe and "fall for the cheap promises that are never kept." When did you last talk to someone who admitted to trusting a politician or believing they'd keep their promises? People don't believe and "fall for the cheap promises", they just vote for whoever they think will deliver the most or take the least, or ensure that they or their kids have jobs to go to etc. They are generally very cynical about the political process. But in a prolonged period of political downturn, people have virtually no confidence that they can effect change. TINA is still a very dominant trend in society. I think there are a few signs that things might start to change, but I don't think they're really helped by things like a call for no GST on food.
Cheers,
John
I think there are a few signs
This is where I disagree with you.
The purpose of the GST increase is to reduce private debt by creating a disincentive for debt fuelled consumer spending in the form of increased consumption tax. However, not all consumption spending is discretionary or funded by debt. Accordingly, it does not make sense to increase the consumption tax on non-discretionary spending, such as basic food items. I would be surprised if we differed on this point.
Where we do differ is the manner of trying to influence change. The best method is to try and engage with the processes that are currently in place to bring about reform. Governments have shown themselves responsive to knee-jerk emotive issues like animal abuse, the provocation defense, protection of wildlife etc. It makes sense that they would also be responsive to public pressure on a more important point like tax policy.
With respect, trying to effect change outside the accepted legal and political processes is not likely to achieve much. Public sentiment will turn against the viewpoint. The government is likely to try and suppress it. It is highly unlikely to get any traction. Popular revolution relies on support from an abused and suppressed majority. No such thing exists in NZ.
Responsive Government???
Do you really believe governments "have shown themselves responsive" to progressive change? I'm not convinced.
I'm not sure actually why you see campaigning for GST off food as a legitimate act of public pressure while campaigning for GST off everything is some kind of attempt "to effect change outside the accepted legal and political processes". What category does Labour's "our 12.5% is OK but their 2.5% isn't" fit into then; the legal and legitimate or the "outside the accepted legal and political" one. Presumably the first because it's a weak and worthless position. No one in this thread has even mentioned "trying to effect change outside the accepted legal and political processes" except you. What point are you trying to make?
Cheers,
John
Consumption tax
Good reasons exist for imposing/increasing a consumption tax. The NZ economy suffers from high discretionary spending rates. This means low savings, high debt, domestic underinvestment and a reliance on foreign capital. Creating a disincentive for such discretionary spending by increasing the cost through a consumption tax goes some way towards remedying this.
However, I do not support consumption tax on basic necessities. People will buy basics regardless of tax. Accordingly, imposing the tax on such items do not further its purpose of reducing discretionary consumer spending. Of course, there may be "boundary issues" and the issue of complicating the system. However, the Aussies have shown that these are no big hurdles. And they are an example that we can follow.
NZ's current reality is a broad consumption tax with no carve out for "basic necessities". I believe the most effective method for trying to change this is to use the existing institutions and processes. They may not be perfect. However, trying to go outside those institutions and processes generally results in more harm than good for one's cause.
For the record, (and back on the original topic) I think the Green's idea of a Code of Conduct is weak political window dressing. We don't yet know whether a problem exists. But if it does, its not clear how a Code of Conduct will help. What we needed was an independent investigation and, if a problem was shown to exist, effective solutions. Not a political crusade and aspirational twaddle.
Probably trying to save us
Probably trying to save us from the popular revolution that won't happen because of the oppressed underclass that doesn't exist, except in Lentil's feverish nightmares of Remuera in flames before the ravages of the barbarian hordes.
No. Just trying to convince
No. Just trying to convince fringe looneys there's a more constructive way of making a point than running around in the bush pretending to be Al Qaeda.
running around in the bush
Gee so the left is plotting a 9/11 over GST rises? Lentil? Really? I think you might need to lay of the saturday night specials mate, you're losing the thin plot you already had. There are a lot of people in this country who hate...this little economics game your mates are playing. When they create a disincentive for the middle class, poor peoples lives get destroyed, kids go hungry.
Make the connection mate, between the chess pieces the economic nazis are moving around, and the affects on the lives of people. Most of the working class and all of the burgeoning underclass have never had any disposable income to speak of EVER, and these so called economic disincentives will drive them even more to the likes of GE Money and other loan sharks to be able to get through next week with fed kids.
Read my comment. I support a
Read my comment. I support a GST carve out for basic necessities. That would eliminate the prejudicial effect GST has on lower income earners while maintaining the disincentive for discretionary spending.
My point was that the most effective way of getting the solution we want is to use the existing processes and institutions. Going outside those processes is counter-productive.
And since you've brought up the topic of the poor, discretionary spending and debt, let me make a couple of comments. Even if you're on a benefit, the government will give you enough to survive. It won't be comfortable, but you'll live. The problem is that because of financial illiteracy, lack of discipline and social pressure, the poor spend money they don't have on things they don't need. Although it's unfortunate, it's still a choice.
Who's up for a spot of
Who's up for a spot of running through the bush pretending to be Al Queda then?
Who's up for a spot of
Neville The Real Lentil Gibson reckons all of us are. First it starts with growing your own brocolli, next minute you're protesting against animal cruelty, then its hop step and jump and you are running up the Kyber Pass to meet the Big O (and I dont mean Kyber Pass, New Market either)
http://video.google.com/videoplay?docid=-947291905241301873&hl=en
I'm just glad that we've been
I'm just glad that we've been shown the error of our ways. I'm off to uproot the vegetable patch immediately before it leads to even more subversive behaviour.
WHAT TO WE WANT?
MODERATE AND SENSIBLE CHANGE WITHIN THE BOUNDS OF THE LAW!
WHEN DO WE WANT IT?
AS SOON AS THE APPROPRIATE FORMS HAVE BEEN FILLED IN!
Most of the working class and
Tautoko. I think the most productive solution for those struggling to survive is to start preparing a space in their back lawn or front porch for a garden this year. People need to give it a go to show themselves that they can produce their own food and at a fraction of the price that these scoundrel big wig food chains are wroughting us for.
Families in this country are spending $300 - $400 a week on supermarket groceries, or which a portion of that is vegetables which are now 3 to 4 times more expensive than they were a couple of years ago.
I think it is time that people concerned about the cost of veges call it a day on the agricultural experiment where industry grows our veges and take that part of their lives back. Not only will you save huge amounts of money, but you will live better too.
Ka(i) pai.
I think growing one's own vegetables is a great idea. And exercising one's culinary flair is great too.
Talking about tax is a
Talking about tax is a side-issue. We need to free ourselves from the shackles of materialism and self-interest. Once we know that most material goods are worthless, and we learn to see one another as equal creatures, we won't worry about tax and debt and inflation. It's all a diversion from your true self.
If you don't want your money
If you don't want your money or property, can I have it?
Your possessions end up
Your possessions end up possessing you. Free you body from worldly desires and your mind will soar to the heavens. Money and property are prisons of the soul. Why would you want to put yourself in prison?
I'm just as much of a
I'm just as much of a materialist as you are. I don't believe in the same models of ownership and distribution of wealth however. There's more than one way to skin a cat, as they say.
So no you bloody can't, but I will share generously if their is a mutual sense of reciprocity.
"Dumb" or perhaps rather passive, cynical yet selfish
John I choose to agree to disagree with you on the GST matter. I am thinking about the present situation. Most of us would rather see more profound and real change in society, and you yourself admit that this is not likely to happen in the foreseeable future.
When I use the word "dumb" for voters, then I am observing all that is going on in NZ again and again. We have changes between National led and Labour led governments. The vast majority of the population still puts some faith in these large parties and their not so dissimilar policies. The vast majority do still vote and the clear majority of the voters vote one or the other of these big parties. So if so many are so cynical about politicians why do they then not open their minds and think about and choose real alternatives?
They obviously are not!
Truth is that the vast majority of people may moan and complain about their own personal lot with feeling cheated about tax cuts, having to work more and more hours to maintain their living standards and fearing for loss of employment, loss of their business, lack of proper health care, about secure retirement incomes, putting their kids through school and so forth.
They are valid concerns, but at the same time many still choose to go into debt to buy newer model cars, computers, ipods, DVD players, big screen tvs, go on a holiday trip to Australia, the Islands or elsewhere.
There is little true collective concern. Most worry about themselves, their immediate family and "perhaps" even their next door neighbour (not necessarily the rule here in Auckland).
I see a lot of selfishness, competition, envy, running down of beneficiaries, and many other negative forms of behaviour.
An intelligent and open minded person would and truly should realise that this does not lead to a healthy society what is going on here. Yet all criticism is limited to cynicism and otherwise passive following of the trend and trying to manage daily challenges.
Maybe "dumb" is the wrong word for it, but I see little intellingent behaviour in the way so many behave.
Why are they not sharing our views? Because ultimately they choose to be selfish and still think they would be better off under a capitalist system with perhaps some small diversity between supposed "left" and "right" of centre governments.
So I just wonder why that is? Are we failing to convince people or are they perhaps not interested in what we know, think and may suggest to them?
Given this scenario I doubt whether ever anything will change. If you want to establish a dictatorship by not using the voting system, will you succeed with so many people having "agenda number one" on their minds? You may be locked up of even shot before you even start such a kind of revolution. That is the harsh reality we face.
In view of this a debate about GST may indeed be a small but worthwhile discussion.