ComCom to Charge Foodstuffs NI With Cartel Conduct

15 July 2025

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Hallelujah! Its only a couple of weeks since I criticized the Commerce Commission’s action in “warning” Foodstuffs North Island about unreasonable dealings with a supplier, saying that only a breakup will fix the core problem of excessive market concentration.

This morning the Commission has come out with a major escalation. Its charging FSNI and Gilmours with alleged cartel conduct.

That’s a big stride forward. Cartel conduct – the legal term for abuse of market power, AKA bullying - is a big deal. Its at the top end of the scale of offences. Penalties range up to 10% of the miscreant’s annual turnover. For FSNI, that’s quite a lot of money!

The allegations seem clear. A national grocery supplier is alleged to have agreed to deal directly with a major national hospitality customer, thus avoiding the wholesale margin. But Foodstuffs allegedly discovered the deal and used its dominance to step in and force the supplier to go back to the wholesale channel.

Back in my day (boring, I know) it was routine for manufacturers to deal directly with individual stores as well as via wholesale. That made for a very vibrant wholesale market with genuine competition.

Today’s industry structure feels mafia-like by comparison.

I still believe strongly that only an enforced breakup of the supermarkets will finally solve this problem. But today’s announcement takes the Commission’s involvement to a new level. All power to them.