Labour promises wholesale split, National backs Foodstuffs break-up

Labour would require Foodstuffs and Woolworths to operate their wholesale arms independently of their retail arms if it forms the next government.

The policy would give smaller grocers guaranteed access to wholesale product and bar wholesalers from cutting off supply. It would also remove restraint of trade provisions that stop smaller retailers, including Four Square stores, from discounting below set prices or from leaving their banner to trade independently. Labour leader Chris Hipkins said the changes would make it easier for new supermarkets to open.

Hipkins and commerce and consumer affairs spokesperson Arena Williams launched the policy at Plenty Foods grocer in Upper Hutt. The party's release, titled Labour's plan for fairer grocery prices, states Labour will take immediate action to increase competition to give New Zealanders more choice and fairer prices at the checkout Labour. Hipkins and Williams said the reforms could be delivered in the first 100 days of a Labour government RNZ.

That timetable is contested. Consumer NZ said none of the grocery proposals now before voters could be done quickly. Chief executive Jon Duffy said it was encouraging that debate had moved from whether the government needs to intervene in the grocery sector to how it should do so. He said creating two independent wholesalers looked like a good idea but he wanted more detail on how separation from the retail arms would work.

Labour's wholesale split has drawn tentative support from the Greens and criticism from ACT. National pointed to advice commissioned by the previous Labour government to argue the wholesale separation model would not work.

National is campaigning on a different structural remedy. In a 15 September release titled National to pursue separation of Foodstuffs, the party said it would pursue structural separation of Foodstuffs into two rival nationwide chains to boost competition and reduce grocery prices National. New Zealand First has also put forward a plan to split up Foodstuffs.

Coalition arithmetic hangs over both promises. Prime Minister Christopher Luxon could not say in March last year whether National's coalition partners would support plans to break up the supermarket duopoly. Under MMP, either a wholesale access regime or a retail divestment would need coalition agreement, a legislative vehicle under the Commerce Act, and a Commerce Commission enforcement and monitoring function. None of those elements has been specified in detail.

Labour is framing grocery prices as a National failure. In a separate release titled Kiwis are paying higher prices for National's failures, the party claimed bread prices had jumped 66 percent and butter prices were up 72 percent. National, in turn, has attacked the Greens' answer on groceries as a $2.8 billion Government-owned supermarket that would put taxpayers on the hook.

Looking at what this means for people who will have to implement or scrutinise either model, the distinction matters. Labour is proposing vertical separation between wholesale and retail within the existing duopoly. National and New Zealand First are proposing horizontal separation at the retail banner level. The first tests whether regulated wholesale access can sustain independents and new entrants without a change in store ownership. The second tests whether two Foodstuffs successors would compete hard enough on price, procurement and logistics to shift the market. Both would require complex secondary legislation, transitional arrangements for supply contracts and franchise agreements, and a credible threat for non-compliance. That is why Duffy's caution on timing carries weight in the Press Gallery and the Beehive. First-100-day pledges organise a campaign. Grocery market restructuring rarely fits that timetable.