National wants to split Pak'nSave and New World to cut food prices

National wants to split Pak'nSave from New World to bring grocery prices down.

The plan has a condition. First there would be a six-month check by the Commerce Commission, the body that watches competition. National would only make a law to force the split if the Commission said shoppers would be better off, according to RNZ.

Foodstuffs is two groups owned by store owners. It runs all New World, Pak'nSave and Four Square stores. It is a bit like splitting one big team into two so they compete harder.

Under the plan there would be three main chains: Pak'nSave, New World/Four Square, and Woolworths. National put the plan on national.org.nz as "National to pursue separation of Foodstuffs".

National will not take the plan to Cabinet, the senior ministers who make Government decisions, before the election. It wants voters to approve it at the election.

Finance spokesperson Nicola Willis said the plan is based on a study by Sense Partners that weighed costs and savings, plus two outside checks she ordered as finance minister.

That study gives the numbers. National said prices could be about 5 percent lower than otherwise, saving households up to $1320 a year. Sense Partners said prices would be about 3.5 percent lower in the first year, according to RNZ. By 2035, yearly savings would be $200 to $1320, based on income and family type. National spoke of $12.6 billion for shoppers over 20 years. The study put the overall gain at $2.9 billion after lost store profits were counted. The economists said the work was a guide, not a final answer.

Labour leader Chris Hipkins called it just another review. "New Zealanders can't eat a review," he said. New Zealand First put out its own break-up plan in April. National has now put out its plan before the election.

The broader context here is that voters are asked to say yes first, with detail to come later. There is no Cabinet decision now. The test and the detail would follow after the election.

In my view, the six-month check will do a lot of work. It will need clear rules, a clear way to judge prices, and a plan for split costs and supply deals. The two big numbers will be argued over. Critics will point to $2.9 billion. Supporters will point to $12.6 billion.