National's plan to split Foodstuffs, explained
National has proposed splitting Foodstuffs in two to lower grocery prices.
The plan would need a review by the Commerce Commission, the independent body that checks competition, to decide if shoppers would be better off. Foodstuffs is made of two co-operatives, member-owned groups that run all New World, Pak'nSave and Four Square stores. Under National's plan there would be three country-wide chains: Pak'nSave, New World/Four Square, and Woolworths RNZ.
The Commission would assess the split before any break-up went ahead. National has not called for an immediate sell-off. The proposal would only proceed if there was a finding it would lift competition.
National's modelling estimates prices would be 3.5 percent lower after one year and 5 percent lower after six years. Finance spokesperson Nicola Willis said a split could eventually save households up to $1320 a year RNZ.
Reaction has split. University of Auckland senior marketing lecturer Drew Franklin called the proposal a "step in the right direction". Consumer chief executive Jon Duffy welcomed the idea of splitting Foodstuffs RNZ.
Business has pushed back. BusinessNZ director of advocacy Catherine Beard said the plan was concerning and could harm New Zealand's reputation 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.
The idea is not new in Parliament. NZ First is campaigning to split Foodstuffs into two co-operatives, with New World and Four Square in one company and Pak'nSave in the other. The Greens want a government-owned supermarket. The Government has said shoppers are being poorly served by a market "effectively dominated by Foodstuffs and Woolworths" Beehive release.
Regulators have covered this ground 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 allowing the Foodstuffs North Island and Foodstuffs South Island merger "would further concentrate power in an already densely concentrated market". The Commission published a 2024 Annual Grocery Report as a benchmark for competition.
Ministers have also acted on new entry rather than break-ups. In August 2025, New Zealand said it would introduce laws to speed up approval of new supermarkets Reuters. Willis said some respondents to a government-run feedback process on groceries had argued for the break-up of Foodstuffs and Woolworths. Food prices make up nearly 19 percent of the consumer price index, the main inflation measure. Statistics New Zealand data showed food prices fell 0.4 percent in September 2025.
The broader context here is the choice between structural change and helping new rivals enter. A Commission-led test gives National a process answer to the property-rights criticism, but it hands the timetable and the definition of shopper benefit to an independent regulator. The detail to watch is the terms of reference, the comparison the Commission is asked to use, and whether separation means a full ownership split or separate running with shared supply deals for a time.
Looking at what this means for coalition politics, the overlap with NZ First matters more than the clash with BusinessNZ. Two parties now back separating Pak'nSave from New World and Four Square, which narrows the space for talks after the election. It also sharpens the contrast with Labour-leaning ideas for a state-backed store. The policy question will be enforceability. The political question will be who owns lower prices.
