Commerce Commission takes Foodstuffs South Island to court
The Commerce Commission is suing Foodstuffs South Island, alleging the co-operative engaged in anti-competitive behavior by restricting price discounting at Pak'nSave stores. The watchdog claims these rules prevented franchisees from offering lower prices to consumers, violating the Commerce Act.
Why it matters
This case addresses market competition and consumer pricing power within the essential grocery sector.
The Commerce Commission says it is taking Foodstuffs South Island to court, alleging "far-reaching anti-competitive conduct that deprived customers of cheaper prices".
The competition watchdog alleged it implemented and enforced a widespread restriction on independently owned Pak'nSave stores discounting selected products.
Foodstuffs South Island is a co-operative, and the owner of New World, Pak'nSave and Four Square in the south.
Under the franchise model, individual South Island Pak'nSave supermarkets are supposed to be able to compete on pricing, discounts and promotions, Commerce Commission chair John Small said.
"Instead, we allege FSSI (Foodstuffs South Island) applied guidelines and rules that stopped these independently owned and operated supermarkets from offering certain discounts unless they received prior approval," he said.
The commission believed the conduct constituted resale price maintenance, which was prohibited under the Commerce Act.
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