National's plan to split Foodstuffs, explained
National would split Foodstuffs into two rival supermarket groups, separating Pak'nSave from New World and Four Square, to bring grocery prices down.
The policy was announced with little warning on Wednesday morning, on the same day Labour promised to ban big companies from charging excessive prices, according to RNZ.
If it goes ahead, there would be three national chains: Pak'nSave on its own, New World and Four Square together, and Woolworths. No individual Pak'nSave, New World or Four Square owner-operator would have to sell or change brands. The two parts of Foodstuffs would instead run as separate national groups, with their own structures and incentives to compete.
The promise is conditional. National said it would first ask the Commerce Commission, which monitors competition, to spend six months assessing whether shoppers would be better off. It said it would legislate to force the split only if the Commission gave it the green light.
Finance spokesperson Nicola Willis said the change could save households up to $1320 a year. She said grocery prices could sit about 5 percent lower than they otherwise would.
A government-commissioned cost-benefit analysis was released the same day. Its modelling estimated grocery prices would be about 3.5 percent lower in the first year of separation. It estimated the annual household benefit by 2035 would range from $200 to $1320, depending on income and family type.
The same report described its analysis as 'indicative rather than definitive' and flagged potential 'insurmountable' legal and implementation hurdles. Commerce Commission monitoring cited in the coverage puts Foodstuffs and Woolworths at about 82 percent of the grocery market.
The broader context here is a campaign crowded with supermarket policy. Labour's Vanushi Walters had said on 8 September that a Labour policy on breaking up the supermarket duopoly was to come, 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, and had earlier proposed using legislation to break Foodstuffs into two nationwide co-operatives based on brand.
In my view, the structure of National's promise matters more than the headline saving. A six-month Commission test followed by legislation is not a straight break-up pledge. It gives National a pro-competition position for the campaign while leaving the hard design questions until after the election. The practical questions are what terms of reference the Commission would get, what test would count as a green light, and what legislative vehicle could unwind a co-operative structure without forcing store sales.
Looking at what this means for implementation, the cost-benefit caveats will carry weight in that debate. A 5 percent figure from a minister and a 3.5 percent first-year figure from the modelling are not the same claim, and the $200 to $1320 range points to uneven effects by household type. Add the report's own warning about legal risk, and the history that Foodstuffs merged its Wellington and Auckland regions to become Foodstuffs North Island in 2013, and the policy looks less like a single decision than a multi-year parliamentary and court process. That is the space rival parties will now contest.
