The supermarkets, Coles and Woolworths, have supposedly been shutting out New Zealand products in favour of domestic equivalents, prompting Kiwi opposition parties to pressure the government to introduce mandatory country-of-origin labelling.
The news broke as senior politicians from the two countries held their third annual joint meeting of cabinet ministers in Sydney.
‘Disaster for NZ exporters’
New Zealand's main opposition Labour Party said Australian supermarkets had used country-of-origin labelling to effectively “boycott” New Zealand produce, but the lack of such a regulation in New Zealand denied New Zealand shoppers the ability to reciprocate.
“[New Zealand Prime Minister] John Key's failure to get any movement for New Zealand producers and manufacturers in a market where 80% is controlled by Coles and Woolworths is a disaster for New Zealand exporters," Labour food safety spokesman Damien O' Connor said in a statement.
"It is now time to introduce [country-of-origin labelling] in New Zealand so Kiwis can know if they are buying Australian produce and return the sentiment."
Phil Goff, Labour’s trade spokesperson, added: “The decision by Australia’s supermarket duopoly, Coles and Woolworths, to refuse to sell New Zealand vegetables is a fundamental threat to New Zealand’s exporters.
“There is no point in the two countries having abolished tariff barriers over 30 years ago when the supermarket monopolies are achieving the same result by excluding New Zealand exports by a different means.”
Goff claimed that Coles has said it will no longer sell green beans, corn kernels and other products from New Zealand as part of its brand strategy to use only Australian produce. Woolworths has also said it will not stock imported frozen vegetables from New Zealand.
“With the two companies having a retail share of 80 per cent of the Australian market this substantially stops New Zealand exporters from getting vegetables to the Australian consumer. That affects exports worth over NZ$400m [US$330m] a year and the implications for this spreading to other goods are hugely serious.”
The bilateral Closer Economic Relations (CER) pact, signed 31 years ago, has applied to Australian and Kiwi exports and is one of the world’s first free trade agreements. However, the agreement has often been criticised by New Zealand producers who claim that their products are still being kept out of Australia.
A joint statement released by Key and Australian Prime Minister Tony Abbott on Friday made no mention of the supermarket campaign.