More competition in the grocery sector would help keep inflation low and drive productivity.

Cameron Bagrie, lead economist at Bagrie Economics, says the economics support National’s proposal to break up Foodstuffs.

“When you get down to duopolies, you tend to get a little bit of laziness into the system,” he says.

He says New Zealand will never achieve full competition given its size.

“We’ve allowed a whole lot of entities to just get too much scale, and the mistaken belief that that scale is gonna drive down prices,” he says.

He says he would favour structural separation of the retail and wholesale operations, similar to the old Telecom model.

CountryWide CONNECT with Andy Thompson & Sarah Perriam-Lampp is our daily rural show livestreamed from 11am-1pm. Visit country-wide.co.nz on how to watch/listen or download the CountryWide CONNECT mobile app, available on Apple iOS and Android.

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