Labour's Warehouse Split vs National's Shop Split: Grocery Plans Explained

Labour would require Foodstuffs and Woolworths to run their wholesale arms separately from their supermarkets if it forms the next government.

Small grocers would get guaranteed access to wholesale stock, and wholesalers could not cut off supply. Labour would also remove restraint of trade rules that stop shops such as Four Square from discounting below set prices or leaving their banner to trade alone. Leader Chris Hipkins said the changes would make it easier to open new supermarkets.

Hipkins and commerce and consumer affairs spokesperson Arena Williams launched the policy at Plenty Foods grocer in Upper Hutt. The release, titled Labour's plan for fairer grocery prices, says Labour will take immediate action to increase competition to give New Zealanders more choice and fairer prices at the checkout Labour. Hipkins and Williams said the changes could be delivered in the first 100 days of a Labour government RNZ.

Consumer NZ disputes that timetable. It said none of the grocery plans before voters could be done quickly. Chief executive Jon Duffy said it was encouraging the debate had moved from whether the Government should intervene to how it should intervene. He said two independent wholesalers looked like a good idea but he wanted more detail on separation from retail.

The Greens have given tentative support to the plan and ACT has criticised it. National pointed to advice commissioned by the previous Labour government to argue the wholesale model would not work.

National offers a different structural fix. In a 15 September release titled National to pursue separation of Foodstuffs, it said it would split Foodstuffs into two rival nationwide chains to boost competition and cut prices National. New Zealand First has also proposed splitting up Foodstuffs.

Prime Minister Christopher Luxon could not say in March last year whether National's coalition partners would support breaking up the supermarket duopoly. Under MMP, where parties must agree to govern together, either a wholesale access regime or a retail split would need coalition agreement, a law change under the Commerce Act, and enforcement by the Commerce Commission. None of that detail has been set out.

Labour blames National for prices. In a release titled Kiwis are paying higher prices for National's failures, it claimed bread was up 66 percent and butter was up 72 percent. National has called the Greens' answer a $2.8 billion Government-owned supermarket that would leave taxpayers to pay.

The broader context here is the split between models. Labour proposes vertical separation, with the warehouse supply business kept apart from the shops within the same duopoly. National and New Zealand First propose horizontal separation at shop level. The first asks if fair wholesale access can support independents without changing shop ownership. The second asks if two Foodstuffs successors would compete hard enough on price and supply to shift the market. Both would need detailed follow-up laws, new deals for supply and franchise contracts, and firm penalties. That is why Duffy's caution on timing carries weight in the Beehive and the Press Gallery.