National proposes separating Foodstuffs into two competing grocery chains
The New Zealand National party has proposed splitting the Foodstuffs grocery co-operative into two competing chains to increase market competition. The plan would require an independent assessment by the Commerce Commission to determine if it would effectively lower consumer prices.
Why it matters
This policy aims to address high food costs and market concentration in the New Zealand grocery sector, which is currently dominated by two major players.
Subject to an independent Commerce Commission assessment, National is proposing to pursue the structural separation of Foodstuffs - breaking the co-operative up into two competing grocery chains.
“The proposed structure would see New World and Four Square as one nationwide chain and PAK’nSAVE as another. Together with Woolworths, this would mean New Zealand would have three major nationwide grocery chains,” National’s finance and economic growth spokesperson Nicola Willis said on Wednesday morning in a policy announcement ahead of November's election.
Foodstuffs' main brands include PAK'nSAVE, New World and Four Square, and a recent report found that the combined market shares of major grocery retailers Foodstuffs North Island, Foodstuffs South Island and Woolworths were 82%.
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