How do Foodstuffs Get Away With a Flagrant Non-Compete Agreement?

2 March 2026

Today Foodstuffs are pursuing once again their desperate fixation on being allowed to merge their North Island and South Island businesses. The Commerce Commission wisely rejected this, so now they are trying the High Court.

Foodstuffs North Island chief executive Chris Quin claims a merger would create efficiencies that would mean cheaper groceries for consumers. Yeah right – just like the creeping consolidation of their businesses from 4 to 3 to 2 entities. And just like the 2002 merger of Foodtown and Woolworths. Remember prices plummeting? They must think consumers are extraordinarily thick.

The Commission was absolutely right to block the application. Hopefully the Court will hold the line. There are many good reasons.

But one powerful argument has, in my opinion, been overlooked. The North Island and South Island businesses have stated repeatedly that they do not compete one with the other. In other words, Foodstuffs North Island would not establish a supermarket in Blenheim, nor would Foodstuffs South Island set out to buy a group of stores – for example, all the North Island New Worlds – from its northern counterpart.

And as I pointed out last year on this blog, that appears hugely illegal. They could be jailed. – as per a warning video published by the Commission last year.

I just don’t understand why somebody isn’t challenging this situation. Even if the directors aren’t jailed, this would be a powerful way for the government to negotiate a breakup. Imagine if FSNI were required to purchase all the South Island PaknSaves, and FSSI all the North Island New Worlds, with no shared Directors, and all the constraints that apply to genuine competitors in other industries. Real competition!

As an aside, the two Foodstuffs present as “cooperatives.” That implies member-owned and controlled businesses from which shared services and other benefits are derived and distributed equitably on the basis of use, controlled by the rank and file “members”. These days Foodstuffs South Island still appears a genuine cooperative, but the North Island arm is vastly different to its cooperative origins – it comes across as a conventional corporate controlled by a small number of investors directing it from the top down.

I hope like hell that nothing happens to enable a merger without thorough consideration of using the separate North and South entities as a means to enable the breakup that our citizens so desperately need. Or worse, that sets the whole obscenely concentrated business up for sale to an overseas investor. By then it would be too late. God Save Kiwi Shoppers.