Foodstuffs update on merger application

Foodstuffs co-ops in New Zealand has accepted the Commerce Commission’s request for an extension to its timeline for a decision on its application to merge, from 31 May to 21 June.

“Our number one job is delivering value at the checkout – to do this we need to keep challenging every aspect of our business model to be as efficient as we can. As one national co-operative in our small country, we can do it better and faster,” the Foodstuffs co-ops said.

“We’ll continue to work constructively with the Commission.

“That’s why back in December the Foodstuffs North Island and Foodstuffs South Island co-operatives applied to the Commerce Commission for clearance to merge into one nationwide co-op.”

The merger is driven by an ambitious goal for the future – “to become the best grocery co-op in the world, owned by the best local grocery retailers and wholesalers, delivering the best experience and value to New Zealanders.

“It’s taken a lot of work to get to this point. But we never went into this merger process because it was the easy option. We believe it’s the right option and is the next logical step – so we can be more agile, more competitive, more efficient, and better able to deliver value and innovation for customers. It makes sense – that’s why all other major retailers operate nationally, not as two regional island businesses,” Foodstuffs co-ops said.

“There’s a huge amount of detail that goes into a process like this. Our comprehensive application, submissions, and economic analysis set out why the merger won’t substantially lessen competition in any market or harm suppliers, and that having one 100% NZ-owned nationwide co-op will deliver benefits to all our stakeholders: customers, Members, teams, suppliers and communities. “

Ten things to know about why Foodstuffs co-ops believes the merger’s the right thing to do now:  

1. The Foodstuffs co-ops are 100% New Zealand owned by the local grocer families who are on the shop floor every day with their customers, serving their communities. “That’s a great thing for New Zealand, as too few of our key industries remain New Zealand owned.”
2. The two current regional co-ops share strong values and trusted brands like PAK’nSAVE, New World and Four Square, but are today operated as two separate companies that only trade in their respective island and have separate Boards, management structures, supply chains and support centres.
3. The merger would see Foodstuffs realise the efficiency of operating as one national business, like most major New Zealand companies in a market of this size do, including our Australian and globally owned competitors.
4. It would change the way the co-operatives are governed and stores supported – but for customers, Foodstuffs will still be a proudly 100% New Zealand-owned co-operative with each store owned and operated by the same local grocer family. Its focus on delivering the best experience, range, innovation and value for customers won’t change.
5. Foodstuffs is now a Regulated Grocery Retailer with a mandatory Grocery Supply Code that came into force on 31 March 2024 to promote competition and efficiency in New Zealand’s grocery market, ensuring “we are fair, clear and transparent in our dealings with our suppliers and promoting a diverse range of suppliers. We believe this new regulation provides the environment needed for fair dealings between retailers and suppliers.”
6. It wouldn’t change how Foodstuffs helps small New Zealand suppliers to grow by enabling them to supply locally to a single local store (or number of stores) or to test a new product in a smaller store to prove itself. “Our commitment to supporting the growth of emerging New Zealand Suppliers remains.”
7. New Zealand needs an efficient, well run, locally owned grocery co-operative that: keeps profits in New Zealand and employs almost 35,000 New Zealanders who are highly engaged, proud to deliver for New Zealanders, work in a great, safe environment and have amazing career potential, including owning their own businesses.
8. “We need to be more efficient because we are up against other national, Australasian, and global competitors. They don’t and won’t operate as two regional business separated by the Cook Strait like we currently do.”
9. Foodstuffs’ respective Boards have been clear that a merger must deliver meaningful benefits for all stakeholders: customers, Members, teams, suppliers and communities. “We’re accountable for making sure it does.”
10. Foodstuffs is doing the hard work now to plan the merger of its North Island and South Island co-ops into one national Foodstuffs co-op, because “working well as one will make it easier and faster to invest and innovate in what our customers care about: value, quality, and convenience.”