The pendulum theory of politics suggests that policies often swing from one extreme to another without finding a balanced middle ground.

Consider New Zealand’s supermarkets.

Current regulations have made it near-impossible for new large-scale grocers to enter the New Zealand market.

Planning rules typically do not allow more than one supermarket in a centre, generally restrict the size of allowed supermarkets, and often require proof that any new supermarket would not compete too much with existing supermarkets.

If a potential entrant can find sites where they are in-theory allowed to build, getting permission can take months to years. And they will probably also have to deal with the Overseas Investment Office.

Is it surprising that people are not happy with the level of competition in grocery retail?

The solution is obvious.

Lift the de-facto ban on setting up a new supermarket chain.

Set a fast-track process that simultaneously, for however many sites are proposed, rezones the land, consents the buildings, and approves the investment.

Require it to decide within months, not years. And, ideally, let new supermarkets have apartment towers of potential customers above them.

That would be the happy place for the pendulum to stop.

It’s hard to stop that pendulum.

Over the weekend, Minister Willis signalled that ‘all options will be on the table’. She might force existing supermarkets to separate their wholesale and retail operations. She might also require them to sell stores to a new entrant at a price the government considers fair.

She asked potential entrants to tell her what they need.

Even if liberalising land use were enough on its own, entrants have been given a strong signal to demand that the government break up existing supermarkets. Doing so would very likely hurt consumers by increasing incumbent grocers’ costs and the prices they charge their customers. Companies often like regulations that increase their rivals’ costs.

A break-up would be complex. One supermarket chain is a cooperative of independent stores sharing branding and wholesale. The government would force this chain to expel members, regardless of their wish to stay.

It would be like stripping a McDonald’s franchisee of their brand and telling them they had to sign up with Mojo.

It would be great if a government that pretends to like property rights could consider a simple solution firmly grounded in property rights.

Stop the pendulum. Just let people build supermarkets.