Foodstuffs North Island Limited and Foodstuffs South Island Limited say they will appeal the Commerce Commission’s decision to decline clearance for the two to become a single national grocery entity.
In December 2023, Foodstuffs North Island (FSNI) and Foodstuffs South Island (FSSI) jointly filed an application with the Commerce Commission for clearance to merge into one New Zealand-owned co-operative.
Last month the Commerce Commission announced it had declined to give clearance, citing concerns over potential harm to the competitive process.
The Commission said it considered the merger likely to substantially lessen competition in many acquisition markets.
In a statement, FSNI and FSSI said they would appeal the Commerce Commission’s decision to decline clearance for their merger, saying Foodstuffs holds firm in its belief that uniting as one nationwide co-op would “help deliver better prices at checkout”.
Both co-ops’ boards have decided to file a Notice of Appeal with the High Court stating that the Commission’s decision was wrong and that clearance should have been granted, as it said the merger would not substantially lessen competition in any market.
FSNI chief executive Chris Quin said the merger was essential to delivering even more competitive prices for customers.
“Customers have been asking for better value at the checkout, and we believe this merger is the single biggest way we can keep improving to achieve that,” he said.
“By merging our resources, we can make our buying and operations more efficient, which ultimately translates into better prices for New Zealanders.”
FSSI chief executive Mary Devine also said the merger would bring long term benefits to customers and communities.
“Our top priority is always to deliver the best value to our customers, and we firmly believe this merger is the most effective way to achieve that. While we had hoped to start passing these benefits to customers immediately, we look forward to becoming a more competitive nationwide co-op once the legal process is complete.”
The co-ops share ownership of grocery retail brands PAK’nSAVE, New World, Four Square, and Pams, as well as On the Spot in the South Island.
Foodstuffs North Island owns the wholesale brand Gilmours, while Foodstuffs South Island owns wholesale brand Trents.
Last month, Commerce Commission chairperson John Small said the commission was “not satisfied that the proposed merger would not have the effect of substantially lessening competition in multiple acquisition and retail markets”.
“The proposed merger would result in a permanent structural change to the New Zealand grocery industry. We are concerned about the impact this could have on competition and New Zealand consumers,” Small said.
Foodstuffs in numbers
199 Members of Foodstuffs South Island (store owner-operators)
320 Members of Foodstuffs North Island (store owner-operators)
2000 Foodstuffs South Island co-operative employees (excl. store employees)
2451 Foodstuffs North Island co-operative employees (excl. store employees)
5.4 million customer visits in-store and online with Foodstuffs every week
$10.8b Foodstuffs North Island revenue (FY24)
$3.6b Foodstuffs South Island revenue (FY24)
