New Zealand’s boardroom class has graded National’s plan to split Foodstuffs, and the mark is a fail. In the NZ Herald’s Mood of the Boardroom survey, the proposal to have the Commerce Commission assess separating Pak’nSave from New World and Four Square averaged just 1.83 out of 5, with 51% of respondents giving it the lowest possible score.
This is not the supermarket lobby talking. These are directors and executives across property, energy, finance and beyond. Nobody in that cohort is defending grocery prices. They are questioning whether structural meddling will lower them, or simply create regulatory theatre with a cost attached.
Directors see a precedent, not a price cut
The anonymous comments are blunter than the score. A property sector director said the move “seems to be driven more by the need to be seen to be doing something than by any strong rationale.” A non-executive director called signalling the break-up of privately held businesses “unhelpful”, while an energy sector leader warned it “will increase the cost of capital for all industries in New Zealand”.
That last point is the one that should worry every business owner. If a government can legislate a private co-operative into two pieces because the politics demand it, foreign capital will price that risk into every sector, not just groceries.
The modelling promises more than the margin holds
The policy’s economic case rests on Sense Partners modelling, which estimated prices about 3.5% lower in the first year, household gains of $200 to $1320 a year by 2035, and a net benefit of $2.9 billion over 20 years.
A peer review by HoustonKemp, commissioned by Foodstuffs, found the benefits “too good to be true”. Its sharpest finding is arithmetic. Supermarket net profits sit at 2.3% of sales, yet the modelling assumes a profit reduction equal to 3.5% of sales. You cannot cut more profit than exists without implying industry-wide losses.
The review also attacks the assumption that Foodstuffs banners do not already compete, noting “Pak’nSave stores can and do presently win business from New World (and Woolworths) stores, and vice versa”. Both reports were paid for by interested parties. But the margin problem is a logic flaw, not a matter of who wrote the invoice.
Breaking up a co-op means breaking up owners
Foodstuffs chief executive Chris Quin argues the plan ignores who actually owns the business. “The shareholder is the store owner,” he said, warning that regional stores rely on freight costs shared across the co-operative and that grocery prices, up around 15% in three years, have risen slower than rates, insurance and energy.
Quin has called the plans “populist” and said 530 owner families are “quite alarmed”, pointing to a $340 million Palmerston North warehouse expansion proceeding under a policy cloud. Big capital is still moving, for now. The question is what gets quietly shelved.
Lobbyists and economists land in the same place
BusinessNZ’s Catherine Beard called the plan “chilling”, saying breaking businesses apart “does not automatically create more competition”, a warning echoed in the organisation’s formal response about investor signals.
Economist Brian Easton, no business cheerleader, reaches a similar conclusion from a different direction. He notes five of 24 international chains that scouted New Zealand were deterred from entering, and argues genuine competition needs many small firms with easy entry, something none of the parties’ remedies delivers, whether National’s split, Labour’s wholesale separation or ACT’s deregulation.
The real problem is the front door
The competition problem is real. The Commerce Commission’s 2024 report, released in 2025, found the major grocers held 82% of market revenue, with barriers to entry remaining high. Auckland, at 71% concentration versus 88% elsewhere, shows where challengers can gain a foothold. The Commission’s latest annual report should be the benchmark any incoming government uses.
That evidence points to land, wholesale access and entry costs, not to carving up a co-operative of 500-odd independent store owners. Splitting one large player into two medium ones does little for a would-be third entrant staring at the same zoning rules and supply terms.
What happens next
If National governs, the Commission gets six months to make its call, and the boardroom will be watching how much evidence, rather than politics, drives it. Directors have said plainly they want competition fixes that lower costs. A policy that fails its own arithmetic and raises the cost of capital economy-wide is not that fix. The smarter move is to drop the break-up threat and go after the barriers that keep new grocers out.
Sources
- NZ Herald: Supermarket shake-up policies score below 2 out of 5 in boardroom survey (2026-10-24)
- NZ Herald: Foodstuffs restructure could threaten regional stores, chief executive warns (2026-10-21)
- RNZ: Foodstuffs-commissioned review criticises split modelling (2026-10-01)
- RNZ: ‘Chilling’: Business groups speak out against National’s supermarket break-up plan (2026-09-17)
- HoustonKemp: Review of Sense Partners’ analysis of options to restructure the New Zealand grocery sector (2026-09-30)
- 1News: ‘Populist’ streak in supermarket break-up plans – Foodstuffs boss (2026-10-04)
- BusinessNZ: Foodstuffs break-up proposal a concerning move by National (2026-09-16)
- The Gist: Political plans to break up supermarket duopoly unlikely to lower grocery bills, economist argues (2026-10-06)
- Commerce Commission: Annual Grocery Report 2024 (2025-08-06)
- Commerce Commission: Annual Grocery Report 2025 (2026-06-02)
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