In what appears to be a really rushed move National came out yesterday and proposed the compulsory carve up of Foodstuffs.
From Radio New Zealand:
National has made a supermarket break-up a key part of its election pitch, proposing to sever Pak’nSave from New World in a bid to drive down grocery prices.
The shake-up would be contingent on a six-month review by the Commerce Commission into whether the split would actually leave shoppers better off.
If the watchdog gave it the green light, National said it would legislate to force through the separation.
The significant policy was announced with little warning on Wednesday morning, and on the same day that Labour promised to ban big companies from charging excessive prices.
Foodstuffs – made up of two co-operatives – currently manages all New World, Pak’nSave and Four Square stores.
National’s plan would split them up, leaving the country with three nationwide supermarket chains: Pak’nSave, New World/Four Square and Woolworths.
The intent appears to be a desire to gazump Labour’s announcement of strengthened powers to prevent companies from price gouging.
Superficially it is good politics in that National managed to dominate the media cycle yesterday.
But as time goes by you really get the impression that it was rushed, poorly thought through and a policy is search of a media hit.
And it has annoyed National’s supporters.
From Radio New Zealand:
Director of advocacy Catherine Beard described the move as alarming.
“This is a very concerning move by the National Party and sends a chilling signal to businesses across New Zealand that the Government can break up businesses. It also sends the wrong signal to foreign investors looking to invest in New Zealand. We consider this to be in the same league as Labour’s ban on oil and gas exploration and New Zealand First’s promise to split up the gentailers.”
…
[T]he Employers and Manufacturers Association was also critical. Head of advocacy Alan McDonald said the policy undermined the foundations of business and private property rights.
“Seeing a right-of-centre, business-focused political party like National suggest this type of policy will sit uneasily with businesses in New Zealand. It might be a populist policy for a grumpy electorate, but that doesn’t make it a good policy.”
McDonald agreed it sent a bad signal to investors.
“It’s not quite nationalising a private business but it’s too close for comfort. And that’s a terrible signal to send when we’re currently trying to attract much-needed international investment through the government’s open-for-business mantra.”
The proposal has met some private resistance from within caucus with one senior MP saying the proposal was bonkers.
Act is furious. From Newstalk ZB:
ACT’s Leader is furious at the idea of breaking-up Foodstuffs.
If re-elected, and if the Commerce Commission agrees, National would separate Pak’nSave from New World and Four Square to compete with each other and Woolworths.
David Seymour told Kerre Woodham it’ll make the problem worse, but his party is standing alone.
He says just because the focus group polling says people are upset, doesn’t mean you do something simple and wrong.
New Zealand First has complained that it is already their policy and they had already announced this in April of this year.
Which makes you wonder. Why float this now? Why not put it up earlier and seek Labour or Green votes to get it over the line?
Also they have chosen the easier target. They would have been better to go for Woolworths.
Because Foodstuffs is a collective and has a number of different owners under its unbrella who compete with each other for sales. And the proposal may increase grocery prices.
From Radio New Zealand:
Dean Waddell, owner of Pak’nSave Tauranga and chairperson of Foodstuffs North Island, told Morning Report National’s proposal would drive prices up.
He said Foodstuff was “gutted and concerned” by the proposal.
” We’ve spent a lot of time educating political parties around our co-operative structure,” he said.
“We started with five co-ops, we’re down to two and that’s given us the scale and efficiencies and the buying power to stay competitive for our customers. So going back the other way and demerging for us just puts our member stores into a more higher-cost base and a potentially more uncompetitive situation in the years to come.”
Despite Foodstuffs and Woolworths having between them more than 80 percent of the market, he disputed they were a duopoly – saying Foodstuffs was actually “a combination of 500 independent businesses” which work together to achieve efficiencies of scale.
“Don’t forget it reduces our buying power as well, and we’re still a relatively small business from a global scale.”
He disputed claims independent Foodstuffs stores were avoiding competition with each other.
“We compete, you know, every day with our own sister members because, you know, that is how we’re, that’s in our DNA. We want to have more customers in our own stores to drive our own revenue.”
And the proposal is rather weak. All they are going to do is send a letter to the Commerce Commission to determine if it will actually reduce costs. Only if the answer was affirmative would they then legislate.
Fancy proposing something but then conceding that the rationale for it may not actually exist.
I don’t think this will get support from parts of the electorate that are hurting. They have long memories and can think about all of the shitty things this Government has done this term. This will not change that feeling.
Yesterday in Parliament Green coleader Marama Davidson started her question “Kei te Pirīmia, comrade …”.
Everyone in Parliament laughed. Except for the National backbench and the Act Party.
Luxon has as much chance of getting this through as he has of remaining Prime Minister in the next year. And his cynical approach to politics is clear for all to see.
Terrible policies, all of them.
National's won't achieve anything IMO. All that will happen is that any competitive benefit will be soaked up by the reduced economies of scale.
I have similar objections to this as I do with the Green's policy. If the market isn't big enough for more competitors, then trying to achieve this through artificial means, whatever they are, is doomed to fail.
And, a policy against price gouging by Labour? Where would that have got us if it were applied during the current fuel crisis. Fuel at a high price is better than no fuel.
Economic studies from Hurricane Hugo showed that price controls cause shortages.
e.g. https://fee.org/articles/hurricane-hugo-price-controls-hinder-recovery/
The market isn't big enough for the current duopoly to actually compete with each other and isn't big enough for a third profit-driven supermarket to be able to enter or grow enough market share without becoming unprofitable.
Therefore the only way to introduce the competition that people have been saying is necessary for decades, is to have a supermarket that isn't motivated by profit. This is why the Greens policy is the only one that would lower prices.
It's like people don't understand how markets work.
Yep.
Every naysayer of us hat has been proposed neglects to mention excessive profits.
I have tried to find out what Willis said she/they would do about supermarkets last electioneering cycle. It certainly wasn't wait till a couple of months out from the election and announce a half arsed maybe.
.. of what has been proposed…
Sausage fingers and phone.
Nailed it. It requires a 'keep the bastards honest' approach via a no frills national chain providing the basics at low margins which cover overheads only.
Foodstuffs behavior shows they dont give a F and think they can do as please rubbing the consumers nose in it.
Emperor luxon is showing desperation now and Winnie can smell those votes. The caos of this coalition is out there for all to see.
Lucky for NZ they cant agree on how to comprehensively screw us over.
Yes – it's not a problem with the structure of the market, it's an ownership problem.
To imagine that it can be solved by more competition via a third privately-owned player, is to assume that a market actually behaves like it claims to on the packet. You might get a bit of initial price competition, but in time the former duopoly will become an equally exploitative three-way cartel.
Market competition does work well with non-essential consumer goods, but not with the essentials of daily existence, because with the latter, market power all runs in one direction. So, with food we need to look seriously at a non-profit operator that has no private shareholders, doesn't have to pay a dividend to the government, and with all its workers being employees and none being owners. It could be called a SONE (Socially-Owned Non-Enterprise).
There are serious problems to consider. Particularly, what impediments there are to the SONE being able to offer significantly lower prices, even without having to generate dividends for shareholders. Such as can the SONE be operationally efficient enough, and can it acquire the goods it sells as cheaply as private competitors? Can it even afford to pay local produces a bit more than private competitors in order to sustain local industry, while still having lower prices?
Ideally, we might be able restore what should be a social relationship between the producer and consumer of food, rather than having it mediated by an extractive distribution layer.
What makes you think the market isn't big enough for more competitors?
The fact there aren't any other major competitors is evidence in itself. Of course, there are other competitors on the fringes; e.g. The Warehouse, Kai & Co, Local vege markets, local butchers etc.
you're talking about more supermarkets. The Greens are talking about the same number of supermarkets just a different market structure.
That’s a major logical fail! You’ve failed to answer the question.
We have a population of 5 million people over two islands on a long thin country.
Australia have a population of 27 million which may be why they have Aldi and others
….and Australia's economy is 7 times as big as NZ's.
But it can't simply be population size. Ireland has a similar population to NZ yet is has seven chains of large supermarkets and eight chains of smaller stores.
Very low corperate tax rate of 12.5% im sure makes it a far more attractive propostion than our 28%.
tsmithfield is talking about more supermarkets. The Greens are talking about the same number of supermarkets just a different market structure.
Such nonsense! You’d argue that Australia should have more supermarket retail groups because its land area is ca. 29 times larger than NZ!? For comparison, NZ is ca. 6 times larger than Denmark and has about the same population size yet Denmark has heaps more supermarkets than Aotearoa.
It's the population more than land area. Sydney has a population about the size of NZ, Melbourne roughly similar. That's a market of around 11 million all needing to buy groceries. Yes, Woolies and Coles have the majority of the best locations but with that size population there is room for an Aldi and others.
The question was: is still NZ too small for more than a duopoly? You waffled about the shape & size of NZ and then pivoted to Oz being larger. Yet Ireland and Denmark are two counter-examples of strong(er) supermarket competition in roughly same-sized populations. NZ has several major banks, petrol companies, ISPs, etc. I’ve yet to see why NZ is deemed too small by tsmithfield and you for more supermarket competition because of its size alone.
Economies of scale. Yes, in theory, we could have say, 10 supermarket chains in NZ, but they would only have a very small market each and would struggle to make a buck. You could argue, each corner dairy is a separate grocery supplier, and each have a small slice of the market. Aldi have looked and I would say have more grocery expertise than commenters on here (or any of our MP's).
All 3 policies from labour,greens and national are rubbish and won't work.
People spend less of their income on food than in the past, .
Excess profits at $1 mill a day averages out about $73 per person per annum, hardly a massive amount,
How much per person per annum on the profits that aren't excessive?
Is your maths based on the amount of supermarket customers or is that for every citizen?
Rough ball park on every citizen based on $1 million daily excess.
No idea what the unexcessive profit is , but can you imagine how on you're toes you need to be to keep the shelves stocked with a huge variety products some with short shelf lives and juggle a large work force ,?
You are barking up the wrong tree if you want me to have sympathy for supermarkets.
I have family experience from the supplier side of how the industry screwed over vegetable suppliers with unreasonable contracts, pricing and conditions.
Incidentally, also through family (cousins), I know former owners of a New World. Retired before mid 50s with a magnificent house and a handsome property portfolio. All off the backs of the working class.
I think location determines where one buys one's groceries, often just as much, if not more, than price. Apart from that though, most of the competition is between PaknSave and Woolorths, but I don't see that severance from them of New World and Four Square will encourage PaknSave and Woolworths to engage in more concerted competition; and NW and 4 Square will not provide much completion given their locations and limited floor space.
Nobody either likes or believes Luxon/Willis’ policy. Talk about desperate.
Love to know how bad their internal polling is, to precipitate something like this must be dire
Perhaps Luxon fears the Green proposal actually working. Mamdani's effort seems to be going pretty good in NY:
https://substack.com/@theminorityreport1/note/c-338237295?r=8qwyuq
None of the supermarkets have actually opened in NY. First one scheduled for 2027.
The RFP for running them hasn't even closed yet.
https://edc.nyc/program/nyc-groceries
It's a little soon to declare they're "going pretty good".
Thats true but they must be rattled if they are already spending money on lawyers.
Standard corporate practice. Reference the 18-year legal battle Progressive Enterprises spent to try and prevent a PakNSave store being established to compete with them.
https://www.rnz.co.nz/news/business/12503/court-rejects-bid-to-stop-pak-'n-save's-north-shore-move
Don't be obtuse. It's a great initiative, especially since federal SNAP funding has been slashed. If bodegas want to play the ball they should focus on the big corporate shops.
I'm not saying it's not a great initiative, Im saying that it's too soon to know whether it will make a difference – because none are in operation yet.
Perhaps its you who are obtuse, if you can't distinguish policy and good intentions from reality.
After they've been in operation for a year, let's come back and evaluate them.
It might seem a bit childish on the face of it, but I would love it if Labour (and the Greens) started to refer to Luxon as "Comrade Luxon" both in the debating chamber and beyond.
I get the impression the Nats are trying to re-create the Dancing Cossacks fear syndrome of 1975. It would be so funny if their opponents were successful in turning it back onto them.
https://nzhistory.govt.nz/media/video/dancing-cossacks
Every accusation is a confession with National. Post 1975 we had Muldoon's price controls, and Supplementary Minimum Payments, both about as close to direct government control of business, ie communism, as you can get
Every accusation is a confession with National. Post 1975 we had Muldoon's price controls, and Supplementary Minimum Payments,
There was also the warehousing of wool, when we were unable profitably sell it.
I've been looking at Graeme Hart's business history. Interesting. It has been financially and it seems, managerially successful. Meanwhile the losers in NZ government and acolytes are taking we 'shareholders' down. With the proven success Hart jas, ask him to enter a contract to manage the country and kick National out! Let a winner have a go, we would be better off. Another term under the Cock-ups and we will be in Doldrums.
And what about our navy and its ships? Harte keeps expanding, keeps adding length to his yachts; it is interesting that he gets the work done in Norway.* I feel like saying 'We'll have what he's having thanks'. If we didn't have our Tweedledee and ..dumb governments to reneg on contracts and lose us money with no national advantage, we might spend more wisely. https://en.wikipedia.org/wiki/Graeme_Hart#Politics
I think Foodstuffs is owned by NZs. If that is the case then National would be deliberately weakening our own assets. I suggest encourage The Warehouse to step up as a viable alternative, offering specials, and specially if it is still in NZ ownership. Let them compete with the others more on basics, selling made-in-NZ stuff!! It is interesting how New World is being bombarded by Hubbards cereals/ mueslis now owned by Australian? based Hart family.
The Warehouse already sells various basics, particularly bread, milk, fruit, veg, eggs, some meat etc. Their butter and egg specials have forced everyone else to follow suit, so there is some good work there. That said, surely if there was money to be made doing more, they would have done more by now.
Empty words from a PM divorced from reality. The Greens have made a sensible policy announcement on this subject, which, in a modified manner, could work by starting small and building up, rather than being a blunt instrument.
While Labour has proposed a tax on excess profits.
No, they haven’t.
You’re selling porkies again.
You're quite right, Labour don't plan to tax excess profits (from supermarkets and other large companies), the propose to make them (the excess profits, not the companies) illegal.
That’ll teach me to think I remember a policy without checking.
https://www.rnz.co.nz/news/politics_election-2026/1410372/labour-pledges-to-ban-big-companies-from-charging-excessive-prices
National has been talking about doing this even since they were last in opposition. Three years on still talking about it and that's what they will continue to do, talk about it but never do it.
Nicky-no-Boats was all talk.
https://www.rnz.co.nz/news/business/501345/supie-failure-nicola-willis-says-third-entrant-needed-to-break-up-supermarket-duopoly
https://www.rnz.co.nz/news/politics/489746/removing-gst-splitting-up-supermarkets-what-s-the-best-way-to-bring-food-prices-down
[NB If you read on, you’ll notice that her focus was clearly going to be on something else!]
No Right Turn highlights the ability of Green policy announcements to shift the window from "inconceivable" to "eminently doable"
Luxon’s response to the cost-of-living crisis:
https://www.facebook.com/NZLabourParty/videos/you-need-to-see-this/2586998348414623/
Luxon is not merely out of touch, he’s an arrogant leader of the Coalition of Conceited.
Reminiscent of Marie Antoinette's "Let them eat cake" as a expression of not caring and/or not being aware. It's the opposite of being 'woke'!
The only difference between what Marie Antoinette said and what Luxon said, is that Marie-Antoinette did not say it…….
I'll believe the Nats on this when I see it.
Shaun Yeo, in the Otago Daily Times, 17 Sept 2026
Hmm – "a bit like Venezuela" – careful now Luxon
Indeed.
And it seems even Labour are starting to grasp it.
In response to National's proposal to break up Foodstuffs, Hipkins stated New Zealanders deserved "more decisive" action.
Dismissing National's policy as little more than "another review".
Going on to say, "New Zealanders can't eat a review"
Labour would have more to say about supermarket competition before the election.
https://www.rnz.co.nz/news/politics_election-2026/1410766/national-vows-to-pursue-break-up-of-supermarket-giant-foodstuffs
Hopefully, Labour will come up with something that better aligns to the shift in public sentiment.
The high price of meat
The high cost of meat is one thing that can really drive up the cost at the checkout
With all this talk about buying and breaking up supermarkets to get the cost of food down. Should we also widen the discussion to doing something about us paying international prices for locally produced food?
Now that's a biggie – citizens paying overseas prices because farmers no longer are or feel part of the country and nation's economy – which produces the food.
Whether we buy supermarkets or break them up we are still going to have to purchase food from local producers that want to charge us international prices that a growing number can no longer afford to pay.
So the issue really does need addressing if we genuinely want to lower food costs