WELLINGTON, Sept. 4 (Xinhua) -- New Zealand's first annual grocery report published on Wednesday highlighted the weak grocery competition, and broader, structural problems with the country's trading, planning and regulatory systems.

The report underscored the need for reforms to cut red tape and promote competition, said Commerce and Consumer Affairs Minister Andrew Bayly.

Checkout prices have been rising more than wholesale costs, with supermarket margins increasing, and profit levels remaining higher than expected in a genuinely competitive market, said the report which painted a concerning picture of New Zealand's 25 billion-New Zealand dollar (15.4 billion U.S. dollar) grocery sector.

The tangle of red tape has significantly reduced the availability of urban land for development, creating high barriers to entry and curtailing competition, Bayly said.

In order to resolve it, the Resource Management Act which is under reform enables a greater mix of residential and commercial activities in cities, allowing metro-style supermarkets to open alongside residential developments.

Penalties will be increased in the Fair Trading Act for inaccurate or misleading prices, Bayly said.

Suppliers and wholesale customers will be given a stronger voice against supermarket giants and greater confidence when negotiating retail deals, which, in turn, should lead to better product range and prices for consumers, the minister said. Enditem

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