Why National wants to split up our big supermarkets
National wants to split Foodstuffs in two to lower food prices. Pak'nSave would stand alone, separate from New World and Four Square.
The plan was announced with little warning on Wednesday morning. On the same day, Labour promised to stop big companies charging excessive prices, according to RNZ.
If it happens, shoppers would have three main supermarket groups: Pak'nSave, New World plus Four Square, and Woolworths. No local store owner would have to sell up or change their shop's name. The two Foodstuffs sides would just run as rivals, each with its own head office and reasons to compete.
The promise comes with a condition. National said it would first get the Commerce Commission — the team that checks fair competition — to study the idea for six months and say if shoppers would be better off. It would only pass a law to force the split if the Commission gives it the tick.
Finance spokesperson Nicola Willis said families could save up to $1320 a year. She said prices could be about 5 percent lower than they would otherwise be.
A Government-ordered study of costs and benefits came out the same day. It estimated prices would be about 3.5 percent lower in the first year. It said the yearly gain by 2035 would be between $200 and $1320, depending on income and family type.
That study said its numbers were 'indicative rather than definitive' and warned of possible 'insurmountable' legal and practical problems. Commerce Commission figures cited in the coverage put Foodstuffs and Woolworths at about 82 percent of the grocery market.
The broader context here is that all the parties have supermarket plans. Labour's Vanushi Walters had said on 8 September that a Labour plan to break up the supermarket duopoly was coming, according to RNZ. The Green Party promised on 5 September to nationalise 120 Woolworths and Foodstuffs supermarkets to create a new Government-owned supermarket, according to the NZ Herald. NZ First announced a 2026 campaign policy in April to break up the duopoly, after earlier suggesting a law to divide Foodstuffs into two member-owned groups based on brand.
In my view, how the promise is built matters more than the $1320 figure. It is not an immediate break-up. It gives National a pro-competition line for the campaign and leaves the hard detail until after the election. The key questions are what task the Commission is given, what counts as a pass, and what law could split the member-owned set-up without forcing sales.
Looking at what this means for shoppers and Parliament, the small print will matter. The minister's 5 percent and the study's 3.5 percent are different claims. The $200 to $1320 range means some households would gain more than others. Add the study's own warning about legal risk, and the fact Foodstuffs joined its Wellington and Auckland arms to form Foodstuffs North Island in 2013, and this looks less like one decision than years of law-making and court action. That is where other parties will now argue.
