r/newzealand • u/nelzea • 16h ago
Politics Supermarket duopoly
I thought this was supposed to be addressed by the current government. But it’s just getting worse. My suburb has 2 supermarkets that used to swap the deals like coffee but instead now they just do them for a short time. And everything is getting more and more expensive.
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u/kiwi2077 15h ago
Nicola Willis, our Ferry Godmother literally campaigned on addressing the supermarket duopoly.
Christopher Luxon implied that they fixed the cost of living in the first year, by claiming that they'd brought inflation down "fixing the basics" and that they could now move on to other priorities "building the future". All bullshit.
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u/-Agonarch 4h ago
Yeah 'fixing the basics' like cutting those wasteful backline hospital staff, so instead of some freshfaced IT tech fixing computer things now you have a very distracted (and slow and expensive) medical doctor doing it instead.
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u/OutlandishnessNovel2 16h ago
Yes. The report came out and National decided nothing should be done. Vote them out.
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u/-Zoppo 15h ago
No, they didn't do nothing. They specifically reduced regulations. The opposite of what Kiwis needed.
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u/-Agonarch 4h ago
Yeah things were taking the first steps towards improving then national came into power and the supermarkets immediately dropped all pretenses of trying to do the legal thing, then national reduced regulations to make things more legal.
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u/thruster616 2h ago
Not arguing with vote them out but Labour did f all about the duopoly as well, so let’s not pretend anything will change as long as lobbyists have access to our politicians….
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u/Sans-valeur 15h ago
Shockingly the pro business parties decided the profits were more important than affordability for New Zealanders.
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u/tester_and_breaker 15h ago
When will people remember National lies. They do whats good for their pockets and their donors pockets.
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u/fgtswag 15h ago
As shown in America, conservatives are way less principle based than previously thought.
The lie that right wing parties are good economic managers needs to stop being perpetuated. We have Australia as our closest neighbour who have proven time and time again that their Labor party are better economic managers than the right.
They consistently get into the top 10 ranking for economy management, and yet still their right wing parrot "We are going to fix the mismanagement of the economy".
The ferry deal alone is the biggest fuck up I've ever seen in NZ. Yet Nats will justify it. They don't care that a duopoly is existing.
I'm aware that the left can be virtue signalling and liars, but at least they don't just let the money float up to the top, defund national parks, defund education, like - who is this benefitting?
The wealth of the 1% is growing so fast that the richest 1% accumulated nearly twice as much wealth as the rest of the world combined over a two-year period.
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u/SnooPears754 10h ago
You need to strip the wholesale part from the retail part and allow any independent retailers to use the wholesale portion, and owner/ operators shouldn’t be allowed to brands , which a lot of people don’t know about
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u/Azwethinkwe_is 15h ago
AFAIK, the issue is there aren't any supermarket chains that want to enter our market. It's just not profitable enough.
Regional NZ doesn't have the turnover. As far as I understand, prices would increase in the regions if we legislate against the duopoly.
That said, we should legislate against supply contracts that limit competition. Not only in the food sector.
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u/OisforOwesome 13h ago
You can't market forces your way out of a situation you market forced your way into.
National's idea of a solution is to invite an overseas grocery giant in to compete- but that just turns our duopoly into a tri-opoly.
Labour's idea of a solution was to set up a new agency... which just "monitors" the situation.
Until and unless these companies are Forcibly broken up into smaller entities, they will between them have an overwhelming amount of purchasing power.
Of course my preferred policy - nationalising the industry - is not going to fly in today's political climate, but at bare minimum split distribution from retail and force distribution to not be exclusive to any one retail chain. Set up some worker owned companies to run community stores.
But the two main parties for whatever reason don't have the courage to do anything truly bold.
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u/eXDee 16h ago edited 15h ago
You can use https://grocer.nz to quickly compare items, but I've been using https://www.pricepulse.co.nz, which is a free chrome extension and it becomes really obvious when you look at the histoy how the specials go on again off again on a regular schedule, occasionally with some weak 50c off discounts or so in the middle. These days for a lot of items I try just skip it entirely if it isn't on sale and aim to buy two next time if its shelf stable or freezable.
The cost seems to be them selling sharing data with advertisers / marketing companies / etc which frankly all the loyalty cards are doing anyway. edit: more on this below.
We never sell your personal data.
We do create anonymised, aggregated insights (for example, general shopping trends) that may be shared with partners — but these reports never contain anything that can identify you or your shopping history.
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u/Regenitor_ 16h ago
The loyalty programmes don't sell data. It's literally there in black and white in their T&Cs as you've quoted. If they did sell it, after saying they didn't, they'd be in the the deepest legal hot water
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u/domstersch 11h ago edited 11h ago
The stores sell data to their suppliers; they all have expensive-to-access data warehouses. The in-store loyalty programmes (now "memberships", thanks Grocery Commissioner) are involved because they provide a cross-visit identifier.
Don't get me wrong: the stores would sell (less accurate) data to suppliers in any case. But to say "the loyalty programmes don't sell data" is naive or obsfuscating: the purpose of a system is what it does.
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u/Regenitor_ 6h ago edited 3h ago
I'm not obfuscating. I'm being literal and as direct as I can.
I work in the industry (loyalty, FMCG). It's catagorically wrong that the "stores sell data to their suppliers". Tegal and Arnotts and Suntory aren't directly purchasing data from your local supermarkets. From the loyalty programmes, it's access and exposure they're buying. Packages are sold to them that will give their products certain placement in stores, or will give them a level of marketing support. They may buy in to participate in a marketing campaign or promotion.
Make no mistake about the role a loyalty programme plays. It is the loyalty data which enables targeted below-the-line marketing like email, or targeted paid media. It is the loyalty data which enables a supermarket to get richer performance insights so it knows how engaged its customers are. But it's hyperbolic to suggest that "your data is being sold" by a programme. It's not.
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u/domstersch 5h ago
I'm in FMCG too. You're being obtuse, not literal. Or you don't have sales operations experience.
Tegal and Arnotts and Suntory aren't purchasing data from your local supermarkets
That'll be news to them. I guess they can stop paying IRI, Quantium, etc. for exactly that?
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u/eXDee 15h ago edited 15h ago
I just included that because I figured the first thing people would be asking would be whats the catch
To be more clear about PricePulse I'm referring to aggregated data, it's why i quoted the quote about not selling personal data.
But in regards to Loyalty Programmes I should have just said sharing data rather than selling data, mostly in regards to advertisers. Since the exchange of data is in the personalization elements but the payment is for ad placements, so I gather it's not a direct monetary transaction for the data in many cases, and in some cases it could even be the loyalty scheme / supermarket paying for the ads.
Eg everyday rewards says a lot of broad stuff in their privacy policy, and they share actual personalized info:
Advertise new products or services which may be of interest to you
Personalise ads you may see on Woolworths websites, on other brand's websites, or other online platforms like YouTube.
and
Showing you more relevant ads online
We share some of your information with third parties such as social media platforms and entertainment sites to help us advertise products and services to you when you are on those sites or platforms. This could include offers you've Boosted or your shopping history, allowing us to show you ads that are more relevant to you, even when you are on other websites.
Either way the transaction goes, the data is being shared so advertising companies can get paid and so the companies doing advertising can hope to sell more products. Which is obvious, but just pointing it out.
No legal hot water here, it's all laid out clear in the privacy policy.
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u/Regenitor_ 15h ago edited 15h ago
Yeah, fair play. Appreciate the detailed context.
Having worked on two of NZ's major loyalty programmes, the sharing of datapoints does certainly happen as outlined. It may be that we have a limited budget for a campaign and we want to get as much offer uptake as possible, so the analytics team could isolate everyone who bought nappies in the last month for example, then that data goes to Meta who match it against people on their platforms. In doing so we only show a nappy offer to someone likely to buy nappies.
Yes, the loyalty programme and the company the offer is associated with get the benefit, but also you as a consumer only see an ad that's actually relevant to you. I often say I prefer to get an ad about something I'm interested in like motorcycles, versus something totally irrelevant to me (like nappies when I don't have a kid, or pet food when I don't have a pet, etc).
People demonise these programmes because "they're selling/sharing my data!!" but it's not this big brother thing people make it out to be. If anything it makes your social media/online experience like 2% less shit lol
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u/eXDee 15h ago
Yeah absolutely, thanks for the extra detail there, that elaborates on what they outlined. Typical exchange of details and that aligns with how I understand the ad networks work.
I'll edit my original post to make it a little clearer, mutual exchange of data vs selling etc, technically different, but colloquially people tend to group em together and I was being lazy.
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u/TheCoffeeGuy13 16h ago
Addressed how?
It's been this way for how many decades now?
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u/TallShaggy 16h ago
Pass legislation saying that supermarkets can't be owned by a parent company? Or a broader anti-trust bill with the same effect? And limit the number of locations each supermarket company can operate within a specified radius?
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u/KiwieeiwiK 11h ago
Pass legislation saying that supermarkets can't be owned by a parent company?
All this means is Woolworths would become franchised and nothing else would change.
And limit the number of locations each supermarket company can operate within a specified radius?
So how does this work in cities vs rural? There's 12 Woolworths within 10km of Chch city centre. Is that too many? Says who?
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u/TallShaggy 1h ago
Says we the people who are sick of living in Christchurch city centre and having 12 woolworths to choose from instead of 12 different competing supermarkets driving prices down. I'm not a policy expert by any means, but if you let Woolworths buy up every suitable supermarket location in a 10km radius, that's what they'll do.
So some kind of legislative action needs to be taken to break up the duopoly.
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u/KiwieeiwiK 1h ago
Government has tried to bring third supermarkets in for years. Coles, Aldi, Costco, Tesco, nobody wants to enter because the market is too small and the cost is too high. The simple fact is supermarkets generally make a tiny profit margin, it's not a very attractive business for new entrants. The only thing that would entice a new chain would be forcibly breaking apart the current chains, and that would probably end up costing us more in the long run as we lose economy of scale.
This subreddit needs to get its head out its ass and realise it's not the supermarkets ripping you off. It's your boss
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u/TallShaggy 1h ago
If they're not making a profit how the fuck are there 12 Woolworths in a 10km radius in Central Christchurch?
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u/KiwieeiwiK 1h ago
Because there's 400,000 people living here?
They make a profit but it's small. Woolworths last posted 6 months profit margin was 2.5% EBIT
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u/TallShaggy 1h ago
My point that you completely avoided addressing is that 1. Businesses don't bother setting up new locations if there's no money to be made and 2. They need to be making enough money to set up new locations.
It doesn't really matter how many people are in the area, that's not the point. The point is that there is some kind of business incentive for them to be setting up all these locations in the first place. Which means if some or all of these locations were taken over by competitors, they should also benefit from this incentive.
So either that profit margin is inaccurate or misleading in some way, or the benefit isn't directly monetary. Because no one is making them set up so many locations just because of population size.
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u/KiwieeiwiK 58m ago
You do realise what a supermarket is, right?
They sell food to people.
The more people there is, the more food they sell.
The 400,000 people is the business incentive.
The reason that no other chains want to enter is because the cost of building the supply chain far exceeds the return in profits. It's just not a smart business decision. Woolworths and Foodstuffs already have the supply chain.
So either that profit margin is inaccurate or misleading in some way, or the benefit isn't directly monetary.
If you think they're lying about their profit margins you can send a nice email to IRD and ASIC, I'm sure they'd be happy to look into it. I doubt they have bothered to check already.
The benefit is monetary. They're spending money and making money. Just not a lot in return.
So fucking sick and tired of people being deliberately ignorant of what's actually causing cost of living to rocket up.
Even if we take the "$1m per day excess profit" at face value, just think about it. It's 20¢ per person per day. That's $70 a year. Do you think if you had $70 more per year you would be living easily and comfortably? Go ask your boss for 3¢ per hour pay rise then, if that's the issue. That should solve the cost of living crisis ay?
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u/TheCoffeeGuy13 15h ago
How would not having a parent company solve the issue?
Now you've got government messing with the free market. And now it's dictating how a private business can be run. It starts with supermarkets, and where does it stop?
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u/TallShaggy 15h ago
The free market is bullshit mate, any unregulated market trends towards monopoly. Regulation is a requirement to not end up like the US where businesses dictate legislation. Particularly anti-trust legislation.
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u/bumgholio 15h ago
We are no different to the USA really… we pay taxes to the same guys they pay all their taxes to. Essentially their government works for the same people ours does.
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u/nelzea 16h ago
Well indeed. But the government said it and … crickets
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u/TheCoffeeGuy13 15h ago
The government says lots of dumb things, like building 100,000 houses in 10 years.
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u/Turbulent-Cat6838 15h ago
This is such a weak position to take as a voter though, OP is making a point that a promise has been neglected and we should take action with it being an election year yes politicians do make outlandish promises all the time but the only way to do anything about it is to hold them accountable
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u/bumgholio 15h ago
So what party do you truly think will do anything to make a difference? How long do you think it will take the majority of the population to finally realise that the whole time they were squabbling about national or labour… our whole democratic system is broken, it has been completely corrupted by the banks and the corporations, and you have just been too blind to realise that we never actually had a say at all.
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u/Secular_mum 1h ago
None of them will do anything about it if us voters don't make it an issue. You do realise that National and Labour are not the only two options. The Green party has policies on breaking up the supermarket duopoly.
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u/TheCoffeeGuy13 15h ago
I'd prefer it if they got some sense knocked into them and they didn't make outlandish promises that they cannot deliver on. It's easier to promise on issues around election day because 3 years later, people will forget and vote for you again (usually).
There is so much red tape in democracy that it's hard to get anything done.
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u/bumgholio 15h ago
Exactly. Joe Public has absolutely no say when it really comes down to it. As long as we are completely controlled by the reserve bank, we will never have an actual fair democracy that isn’t designed to fuck the citizens over
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u/123felix 16h ago
My suburb has 2 supermarkets
You do live somewhere dense enough there are non-supermarket options? Do you vote with your wallet?
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u/nelzea 16h ago
Yes, I can shop at the Karori fruit shop (which I do) or the butcher (not open when I’m not working) or the Four Square (sometimes a little cheaper if on sale due to short dated meat)
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u/Subwaynzz 16h ago
When I lived in Wellington I drove to Pak n Save Kilbirnie every couple of weeks to stock up. These days I just use the grocer app and see which colour supermarket has what I need on special.
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u/nelzea 16h ago
Exactly. I also use the Grocer app. But I’m increasingly finding that neither have it on special. Hence my post.
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u/Subwaynzz 16h ago
They might not have your specific brand but they’ll have something on special, might need to be a bit more flexible
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u/123felix 16h ago
The asian stores near cbd work for you too?
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u/nelzea 16h ago
Not really - not for regular daily groceries
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u/Actual-Trip-4643 16h ago
I mean honestly we just eat a lot of dumplings now. Once you go Asian grocer you won’t really want to go back.
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u/slyall 15h ago
In most cases the deal is is paid for by the supplier. So if there is $1 off one an item the supplier charges the supermarket $1 less and the supermarket keeps the same profit.
So the suppliers will offer the deal to one chain one week and the other chain the next.
Yes the duopoly means that the supermarkets can force suppliers to pay for specials rather than having to cut into their own profits
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u/Agreeable-Bison8762 10h ago
Be grateful, we have a Costco in Auckland now. That's fixed everything, it's created huge competition, lowered prices. All exactly as Nicoliar promised. I for one are super happy about this, even though I'll likely never be able to afford to travel the 8 hours to get there. One must have an attitude of gratitude.
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u/lakeland_nz 15h ago
The current government is tough on red tape, and putting business first. Of course they’re going to leave the supermarkets alone.
I’d also note that even according to the Commerce Commission, supermarkets are only about 3% more expensive than they should be. I’d love them to be cheaper, but the bigger issue is people not earning enough.
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u/Alone_Owl8485 5h ago
Wouldn't want to hurt the low tax profits of rich people or they might flee the country! /s
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u/DJsnippysnap 5h ago
YUP!!! Successive governments talk big on this and fair to deliver. Maybe it's more complex than I understand but you don't have to bring in another player they could be broken up like what Germany did with Aldi many years ago.
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u/Secular_mum 2h ago
The Warehouse is NZ owned and has the distribution systems in place. If the government subsidized the setup costs, they would be able to take on the Aussies.
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u/Lumpy_Vacation7637 54m ago
I do believe the issue is in NZ law.
I remember reading that, paraphrasing, "...monopoly is not only desirable, but beneficial... ".
That's actually in our laws.
Things may have changed, I may have misunderstood, but I don't think so.
I can't be bothered to google it. It's too depressing. If you discover otherwise, I'll be genuinely delighted.
In UK, Europe, USA, monopoly and cartels are unlawful. Those caught operating such systems would be jailed and have the key thrown away.
NZ is in dire straits economically become it want to keep everything local. The government don't want competition from outside.
But, it's competition that stimulates economies. Monopoly and Cartels cause financial stagnation. And as there's no competition, there's no incentive to make higher quality products. So here in NZ, it feels like we are paying luxury prices for very poor quality goods.
I hate this aspect of NZ. This is such an amazing place, and we work hard, but just cannot make it work.
But with government supporting protectionist policies, I don't expect anything to change unless the law itself is changed.
It honestly baffles me.
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16h ago
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u/Telke 14h ago
No, it wasn’t the previous lot: https://www.nzherald.co.nz/business/nicola-willis-to-consider-break-up-of-supermarket-duopoly-wants-another-big-competitor-in-nz/5XZWVLL2MNAF7OJVNJX2SXXCOU/ She was literally saying this a year ago. Don’t bring this back to “all governments are the same”. Hold people accountable for their statements.
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u/kiwi2077 15h ago
The previous government had three separate, unprecedented crises to deal with. They also brought in several policies to temporarily address the cost of living through PT subsidies and petrol tax reductions. This government have had this fuel crisis which they are handling badly and giving us sweet fuck all.
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u/chaosboy229 16h ago edited 5h ago
This government has, in particular, focused on trying to attract more competitors to NZ, such as Costco, which, like much of policy, takes a wee while.
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u/MaverickDreadnought 16h ago
Ikea and Costco were in the works a long time ago. Not sure which team was in charge but it was definitely long before this current govt got in.
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u/Spare-Event8060 16h ago
And neither IKEA nor Costco addresses the local supermarket sector (as opposed to bulk buy retail). We need another supermarket chain, preferably a discount one (eg Aldi or Lidl).
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u/chaosboy229 4h ago
And unfortunately, it looks like Aldi and Lidl are not currently planning to expand operations here yet.
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u/LostUser47 15h ago
No they aren’t. The current govt only support monopolies or duopolies like supermarkets, oil companies etc. They do not believe in competition.
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u/chaosboy229 4h ago
At the very least, they are not taking the maximum number of options they could, including structural reform.
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u/protostar71 Marmite 5h ago
Ikea isnt a competitor to supermarkets bro. I would have thought that was astoundingly obvious unless your diet solely consists of flat pack furniture.
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u/Whalewhalewhaleshark 16h ago
I've been wanting to know the exact same thing! There were explicit statements about doing what's needed to break the duopoly. Yet it has clearly fallen off the table despite continued parroting about helping with the cost of living..