In September, Finance Minister Nicola Willis released an MBIE-commissioned Sense Partners report claiming that breaking Foodstuffs into two pieces could be wonderful.
I had my doubts and published them in a short research note. That note is not nearly funny enough to highlight in the third slot of our Insights newsletter.
But the report that Willis didn't release, until Tom Raynel and Kate MacNamara at NZME obtained it, is very amusing.
Reports that ministers do not proactively release are often far more fun than the ones they want you to see.
I particularly love it when a consultancy goes a bit beyond its brief to look at the actual problem, rather than just work through the solution that the government seems to want.
Coriolis did a lot of work for MBIE on the break-up option, but it put that option into context.
Its first recommendation was direct: 'STOP CAUSING INFLATION'.
Coriolis pointed to rapid increases in the minimum wage and the Reserve Bank's balance sheet blowing out, noting that after these things had occurred, 'there was suddenly a problem with New Zealand food prices'.
Indeed. The RBNZ forgot its one big inflation-fighting job for far too long. And there are serious trade-offs with excessively high minimum wages.
They next urged the removal of structural causes of high food prices.
Some, like being far from the rest of the world, are beyond reasonable intervention. Coriolis reminded the government that grocery prices are much higher in Hawaii than elsewhere in the US – so limit your expectations about what policy can achieve.
But biosecurity, costly import processes, expensive development processes and alcohol retail restrictions are all policy choices. Those choices increase grocery prices regardless of how many supermarkets we have.
They could also have pointed to animal welfare regulations that, while defensible, increase egg and pork prices.
Coriolis reckoned that the cumulative effect of those issues is much larger than the price premium it attributed to the 'duopoly'. And it warned that the gains from moving from two to three traditional supermarket operators are not likely to be large.
It expected larger gains from making it easy for a hard discounter like Aldi to enter New Zealand.
Kudos to NZME for unearthing the report Willis didn't release on her own.
It's hard to tell whether supermarket populism hurt National. But any incoming government ought to read Coriolis's report and take more careful aim.