Would splitting our big supermarkets make food cheaper?
National wants to split Foodstuffs in two to make food cheaper.
Foodstuffs runs all New World, Pak'nSave and Four Square stores. It is made of two member-owned groups. National says the Commerce Commission, the independent checker of fair competition, should first decide if shoppers would gain. If it went ahead, there would be three big groups: Pak'nSave, New World/Four Square, and Woolworths RNZ.
Think of it like one big team split into two teams that must play against each other.
The check would happen before any split. National is not calling for an instant break-up. It would only happen if the Commission found it would help competition.
National's maths says prices would be 3.5 percent lower after one year and 5 percent lower after six years. Finance spokesperson Nicola Willis said it could save homes up to $1320 a year RNZ.
Some backed the idea. University of Auckland lecturer Drew Franklin called it a "step in the right direction". Consumer chief executive Jon Duffy welcomed the idea of splitting Foodstuffs RNZ.
Business leaders opposed it. BusinessNZ advocacy director Catherine Beard said it was concerning and could hurt New Zealand's name for "regulatory stability, respect for property rights and predictable policy settings". She said it "sends a chilling signal to businesses that the government can break up businesses" and "sends the wrong signal to foreign investors looking to invest in New Zealand" RNZ.
Other parties have their own ideas. NZ First wants to split Foodstuffs in two, with New World and Four Square in one firm and Pak'nSave in the other. The Greens want a supermarket owned by the Government. The Government has said shoppers are being poorly served by a market "effectively dominated by Foodstuffs and Woolworths" Beehive release.
This has been raised before. Economist Tim Hazeldine told the Commerce Commission the Foodstuffs Co-operative "should be split into two or more fully independent competitors in the New Zealand grocery products market". The Grocery Action Group said letting Foodstuffs North Island and Foodstuffs South Island join "would further concentrate power in an already densely concentrated market". The Commission put out a 2024 Annual Grocery Report to measure competition.
Ministers have also tried to make it easier for new shops to open. In August 2025, New Zealand said it would bring in laws to speed up approval of new supermarkets Reuters. Willis said some people in a Government feedback process had called for Foodstuffs and Woolworths to be broken up. Food prices make up nearly 19 percent of the consumer price index, which tracks living costs. Statistics New Zealand said food prices fell 0.4 percent in September 2025.
The broader context here is a choice between breaking up big firms and helping new ones start. The test gives National cover on property rights, but timing and proof sit with the regulator. Watch the review instructions, what it is compared with, and whether split means separate owners or separate running with shared supply for a while.
Looking at what this means for coalition politics, agreement with NZ First matters more than the fight with BusinessNZ. Two parties now back splitting Pak'nSave from New World and Four Square, which leaves less room for deals after the election. It also makes the gap clearer with Labour-leaning plans for a state-backed shop. The policy question will be enforceability. The political question will be who owns lower prices.
