The Covid-19 emergency: constraints on trading and publishing raise price-gouging and censorship issues

Supermarkets and some publishers are favoured by the government’s imposition of severe restrictions on what we can do and from whom we can buy during the Covid-19 lock-down.

But one consumer watchdog is challenging the legality of an edict by Commerce Minister Kris Faafoi which favours supermarkets while Act leader David Seymour is questioning the pricing consequences of the business ban that has closed bakeries, butcheries and green grocers.

The Freedom of Speech Coalition meanwhile is threatening to launch an urgent judicial review of the Ministry of Culture and Heritage decision to deem non-daily newspapers and publications an unessential service for the purposes of the Covid-19 Level-4 nationwide shutdown.

Even while the government is hearing of price gouging by supermarkets, however, it is considering allowing those businesses to open on Good Friday and Easter Sunday.

Whether the Easter Trading Laws are amended to allow this will depend on whether they need the time shut to restock shelves, Prime Minister Jacinda Ardern told RNZ’s Susie Ferguson.

The Government will be talking to them directly about the issue.

The Cabinet meets again today and – according to a report in the Otago Daily Times – it wants to ensure that supermarket supply chains, pricing, and customer and staff welfare are all up to scratch, given their importance to New Zealanders during the lockdown.

“We don’t obviously have legal footing to enforce specials, but we can on price gouging,” Ardern told Newstalk ZB’s Mike Hosking this morning.

She said the government had seen no evidence of that so far.

She had been speaking to Consumer Affairs Minister Kris Faafoi, who had checked directly on claims of price-gouging of items such as cauliflowers.

While there had been issues of chickens being mistakenly weighted – and therefore mistakenly priced – and some supply issues, the Government had not found any price-gouging issues.

Ardern indicated she was keen on supermarkets opening on days that they were traditionally not allowed to, such as Good Friday and Easter Sunday, so as to give New Zealanders maximum access to food and essential supplies.

But she also wanted to check with supermarkets on whether they needed those days to help re-stock shelves. She said she would have more to say on supermarkets later today.

The Consumers’ Union of Aotearoa has challenged the ministerial press statement from  Kris Faafoi’s which instructed the Commerce Commission to relax its standards for supermarkets and telecommunications companies[*].

While Kiwi consumers already pay more for groceries than any other OECD consumers, particularly relative to wages, the Government has decided supermarkets and other businesses should be given a free pass on their competition law obligations.

To add insult to injury, the Minister’s statement is itself illegal.

The Commerce Commission is required to act independently, and the Minister has not exercised any legal powers under the Commerce Act in directing the Commerce Commission on what to do. Instead he has simply proclaimed – absent any legal basis – that the Commerce Commission ought to ignore its legal duties and obligations to Parliament and New Zealand consumers.

The Consumers’ Union says reducing competition law requirements will substantially worsen the economic conditions for New Zealanders who buy groceries and use telco services – but:

The only thing this Minister’s statement will do is to make it easier for the unscrupulous to profit at the expense of the working poor, and particularly those in rural areas, and growing the profits of supermarket owners and telecommunications company shareholders.

The Minister should revoke his statement and apologise to the Commerce Commission and to the people of New Zealand. We cannot welcome profiteering and anti-competitive collaboration at these times, nor at any time.

The Consumers’ Union of Aotearoa describes itself as an action group dedicated to improving the competitiveness of New Zealand’s market for the benefit of average consumers.

ACT Leader David Seymour similarly insists the government must reconsider its restriction on bakeries, butchers and fruit and vegetable stores.

“The Government has effectively given supermarkets a monopoly on food, but it seems surprised that prices have risen. In some areas, that monopoly power is strong. The same Government that recently spent a year bashing petrol retailers for not being competitive enough must now allow competition in an even more essential sector: food.

“In normal times, supermarkets face very real competition from butchers, bakeries, and fresh fruit and vegetable stores. Supermarkets must restrain their prices in order to remain competitive. People are noticing price increases in part because supermarkets no longer face competition from these outlets.

“Allowing fresh fruit and vegetable stores, bakeries and butchers to open would actually help fight COVID-19. At the same time the Government is asking people to restrict travel and maintain physical distancing it is asking people to travel further to visit busier stores. This is illogical.

“Allowing butchers, bakeries, and fresh fruit and vegetable stores to open would also allow the proprietors of those stores a financial lifeline. It makes no sense for those businesses to go broke when they could be serving consumers, providing competition, and reducing the spread of COVID-19 at the same time.

Seymour accepts that any businesses allowed to open should be required to meet physical distancing protocols. But if dairies can manage it, he notes, so too can bakeries, butchers, and fresh fruit and vegetable stores.

Free Speech Coalition spokesperson Jordan Williams,explaining the launch of an urgent judicial reviewof the decision to deem non-daily newspapers and publications a non-essential service, contended:

“ … No High Court is going to uphold a bureaucrat deciding what media can and cannot operate. This decision was done without any consultation, and on the basis of only daily newspapers and broadcast media being deemed ‘essential’.

 “Assuming the smaller publications can take the same distance and health measures as the ones currently publishing, there is no justification in shutting them down.
“Even at a time of emergency, no civilised society can justify the Government deciding what parts of the media are important and not important. The maxim ‘this is a dangerous precedent’ is overused, but in this case, it literally is.

Ethnic media, now been banned from publishing, reach audiences that the daily press does not, Jordan pointed out.  Similarly, in smaller or aged communities where online access is limited, “local information is absolutely essential.”

“The decisions made by the Government in the last ten days are probably the most significant in our lifetime. Weekly and monthly publications like North and South, the Listener, and ethnic newspapers serve a vital role in the community’s conscience and holding our leaders to account. That is just as important as daily news. These magazines are functionally no different to the likes of music radio or entertainment television, which is allowed to continue broadcasting.”

Even at times of war censorship, the government didn’t choose who could print and who couldn’t, Jordan noted..

If the government did not rethink this, it would face a judicial hearing to review this abuse of public power.

3 thoughts on “The Covid-19 emergency: constraints on trading and publishing raise price-gouging and censorship issues

  1. Reportedly the small regional papers issue was about safety of distribution.Not censorship. There is a real life and death call here folks, not censorship. TIme for a sense of proportion, not assuming bad intentions. And legal action might be resolved before the constraints are removed; but I wouldn’t bet on it. It looks like a reporter creating a stir to no real purpose.


  2. Reblogged this on The Inquiring Mind and commented:
    These reviews and policy changes are critical.
    I am very concerned over some of the behaviour we are seeing.
    I suspect many smaller businesses will never return.


  3. Why the hell are Muslim Halal butchers allowed to open yet our own loyal and decent taxpaying businesses are refused?
    Seems someone must answer this question real soon!


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