National has proposed breaking up supermarket giant Foodstuffs by severing Pak’nSave from New World in an election pitch aimed at driving down grocery prices, according to finance spokesperson Nicola Willis. The significant policy, announced on Wednesday alongside a similar move by Labour to ban excessive pricing, is contingent on a six-month review by the Commerce Commission and subsequent legislation if approved.
National Supermarket Split Proposal and Projected Savings
National’s plan would leave the country with three nationwide supermarket chains: Pak’nSave, New World/Four Square, and Woolworths, according to party announcements. Finance spokesperson Nicola Willis told reporters at Parliament that the policy is a bold and unprecedented step that puts the Kiwi shopper first. The proposal follows a cost-benefit analysis by Sense Partners and two peer reviews commissioned by Willis.
Modelling from Sense Partners estimated that prices would be about 3.5 percent lower in the first year of separation, with household savings eventually reaching up to $1,320 a year by 2035 depending on income and family type. However, according to the underlying analysis, the overall net gain to the economy is estimated at $2.9 billion after accounting for lost supermarket profits. Independent economists also flagged potential insurmountable legal and implementation hurdles.
Political Reaction and Coalition Dynamics
Labour leader Chris Hipkins dismissed the policy as another review, stating that New Zealanders cannot eat a review and deserve more decisive action. Hipkins also questioned whether National could secure support from coalition partner ACT, given that leader David Seymour previously argued the plan would scare away investment. In contrast, New Zealand First announced its own plan to break up Foodstuffs in April.
Willis acknowledged that she has already felt the full force of well-resourced supermarket lobbyists and faces a tough fight ahead. National confirmed that no individual store owner would be forced to sell or change brands. Instead, the two Foodstuffs co-operatives would be split into rival nationwide groups with separate structures.
Market Dominance and Previous Reform Efforts
Commerce Commission monitoring shows that Foodstuffs and Woolworths still control roughly 82 percent of the grocery market, with little movement in competition over the past year. Previous government efforts to curb the duopoly include Labour’s 2020 market study, the appointment of a Grocery Commissioner, and bans on restrictive land deals. Willis previously called for a third major global player to enter the market, but major international chains declined to engage.
Did you know? Foodstuffs operates as two separate co-operatives managing all New World, Pak’nSave, and Four Square stores across New Zealand, maintaining a duopoly alongside Woolworths that commands about 82 percent of the grocery market.
Frequently Asked Questions
What does National’s supermarket policy propose?
National proposes splitting Foodstuffs to sever Pak’nSave from New World, creating three nationwide supermarket chains alongside Woolworths, subject to a Commerce Commission review and legislation.
How much money could households save under the proposal?
According to Sense Partners modelling cited by National, household savings could reach up to $1,320 a year by 2035, with prices dropping about 3.5 percent in the first year.
Will individual store owners be forced to sell?
No. National stated that individual Pak’nSave, New World, or Four Square owners will not be forced to sell or change brands, but the parent co-operatives will be split into rival nationwide groups.
What do other political parties say about the plan?
Labour leader Chris Hipkins criticized the policy as a mere review, while New Zealand First previously announced its own similar break-up plan in April.
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