The government has approved new legislation that prevents supermarkets from blocking competitors from accessing land to set up new stores.
The law will ban the use of restrictive covenants on land and exclusive covenants on leases, tools that have previously been used by major supermarkets to hinder competition by limiting land use and availability.
This is the first in a set of measures that are designed to target the established supermarket duopoly in New Zealand. The measures are a response to a report on supermarket competition by the Commerce Commission, which was released earlier this year.
Minister of Commerce and Consumer Affairs David Clark said “This law will stop the major supermarkets from dictating the terms of leases to block opposition retailers from getting a foothold in an area.
“This is great news for the would-be competitors of the established supermarkets – especially those who’ve found it difficult in the past to find suitable sites to set up new stores.”
The Commerce (Grocery Sector Covenants) Amendment Bill passed its third reading with unanimous support from the House.
