Key Trends in Consumer Policy

Background Paper to Creating Confident Consumers

May 2003

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Consumer Representation

• The New Zealand Experience
• New Technology, New Products

Hadfield et al (p30) put forward the proposition that consumer activism seems to be in abeyance, and that attempts to create new consumer groups or to reinvigorate existing ones have largely met with disappointing results. Allan Asher has also noted that unless the consumer movement makes some radical changes, it risks becoming increasingly irrelevant to the changes in the marketplace (ibid., p1). Whether these risks are applicable in New Zealand is not yet clear, but the consequences would be far-reaching if, for instance, New Zealand consumers do not have a voice in the future direction of consumer policy.

The New Zealand Experience

In comparison to Australia, Canada and the United Kingdom, for example, consumer organisations in New Zealand are relatively small in size and influence.

MCA has formalised its relationship with a number of NGOs it believes are key to its ability to tap into grassroots information about consumer needs and wants. [8] The relationships are based on mutual benefit and trust but may require strengthening and better resourcing if the Ministry's future strategy is to be based on an informational framework. For example, via formal agreement we may request an NGO to provide us with data on the types of consumer complaints received and statistical information about the consumers who use their service. Even though NGOs are an obvious potential source of data to inform consumer strategies, the organisations themselves suffer from a lack of resources, with many reporting that funding by government is targeted at direct service delivery with little or no funding available for research and the collation of basic data. They also report: [9]

• a lack of access to information and communications technology, risking an inability to enjoy the advantages of a "knowledge economy"
• that access to government funding and the associated accountability processes are complex and time-consuming
• a lack of resourcing to enable information-sharing or research from which to develop policy advice. It is therefore difficult for community groups to respond to the renewed interest by government in seeking community participation in policy development.

As well as seeking the input of key NGOs, MCA will need to work co-operatively with other public agencies to ensure that the above problems are worked through.

The interests of consumers are diffuse-many go beyond the retail transaction and the abstract super-rational shopper looking for the best deal, but not all are represented by special interest groups; consumer interests may not necessarily be evident to policy-makers. We cannot afford to overlook the contribution that other, as yet unrecognised, consumer groups may offer in terms of knowledge of consumer issues. The proliferation of niche interest groups, many of whom may meet on the Internet and require little or no physical participation from a constituent base, may be more attractive to a new generation of consumers who wish to work toward very specific rather than general aims.

New Technology, New Products

In particular, consumers are demanding from government both input into and information about food and health products. Internationally, the initial reaction of governments and industry was to rely on science to deny the relevancy of consumer concerns. While science may ultimately prove that consumer concerns are unfounded, the consumer voice in these markets is so strong that it refuses to be ignored. The failure of governments to communicate about the actual concerns of consumers about food technologies has resulted in consumer unease. Whether or not the concerns of consumers are rational according to science ignores the reality that those concerns will have long-term consequences for economic growth. In a discussion paper on developing a food safety strategy, Dr Frewer of the UK Institute of Food Research notes:

To date the response from governments has been: that if consumers understood the science, they would accept the emerging technology and that the way forward for science policy was to "educate" consumers in order to generate acceptance. It does not take into account the role that trust in institutions and information sources may be in determining public responses to risk communications. There are also likely to be large individual differences in people's beliefs and information needs, and these should be understood and information adapted and targeted to suit these different information requirements.

(Frewer, p4.)

The reluctance of government to give support to consumer groups championing these and other issues may unintentionally undermine parallel initiatives to gain trust and co-operation from the same groups.

[8] For example, Māori Women's Welfare League and National Association of Citizen's Advice Bureaux

[9] Report of the Community-Government Relationship Steering Group, 2002, p13

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