The supermarket and its influence upon the New Zealand market structure for fresh fruit and vegetables : a dissertation submitted at Massey University of Manawatu in partial fulfilment of the requirements for the degree, Master of Agricultural Science

Abstract

Since 1958, supermarkets have been selling fresh fruit and vegetables, (otherwise known as fresh produce), in New Zealand. Their merchandising policies differ in many ways to those which characterise the traditional market structure of grower, wholesaler and greengrocer. Accordingly, the subsequent effects of these policies upon the three parties mentioned have been many and varied. Of paramount importance in this respect is the practice which involves the supermarket's bypassing of the wholesaler and purchasing his supplies directly from the grower. Obviously, this must adversely affect the wholesaler, and it is for this reason that the constraint upon the extent of direct procurement by supermarkets receives particular attention. The determining legislation behind this constraint is enforced by the wholesale industry, and it limits the realisation of cost economies by growers and supermarkets from purchasing direct. Furthermore, the grower views a laissez-faire policy of direct sales as a step towards his domination by monopoly interests at retail. This is a point of conjecture, but its importance lies in the fact that auction is viewed by growers as the means whereby this possibility can be prevented. The wholesale industry unequivocally determines certain activities of the growing and retailing industries for fresh produce. Whether or not it should possess this right is a further point of conjecture, because by virtue of its operations and the present lack of competition, it engenders monopsonistic-monopolistic practices, and carries a negligible amount of the risk involved in the distribution process.