National has announced it will "pursue" breaking up grocery giant Foodstuffs so New World and Four Square become one chain, and Pak'nSave another, if re-elected.
Alongside Woolworths, which would remain Australian-owned, that would give the country three major grocery chains instead of two. Foodstuffs currently owns the Four Square, New World and Pak'nSave brands.
Under National, finance spokesperson Nicola Willis said the Commerce Commission would have six months to test the separation proposal and make a formal recommendation.
"New Zealanders are paying more than they should for groceries because supermarket competition is still too weak. Families deserve more choice, better prices and supermarkets that have to fight harder for their dollars," Willis said.
"Our initial view is that New World and Pak'nSave would compete harder on prices, specials and service if they were genuinely independent of each other.
"They currently sit within the same Foodstuffs structures.
"Separation would create three major nationwide grocery chains and put more pressure on supermarkets to win and keep customers.
“If the commission recommends separation, National will legislate to implement it."
Willis did not necessarily commit to a break-up, saying her party "will not have politicians playing supermarket executive from the Cabinet table."
The policy announced today would be one of the most aggressive moves by political leaders yet against New Zealand's grocery duopoly.
The Grocery Industry Competition Act is giving smaller players the chance to offer cheaper goods. (Source: 1News)
Both major parties are duking it out as cost of living remains a critical issue for voters.
Labour announced, minutes before National, its plan to make it illegal for big companies to "charge excessive prices for essential goods and services". Meanwhile the Greens have proposed setting up a state-backed competitor, KiwiMart.
Willis said National would amend the Grocery Industry Competition Act within its first 100 days in a re-elected government to let the Commerce Commission "determine whether the separation can be delivered in a way that leaves consumers better off".
National has cited "independent analysis" estimating restructuring Foodstuffs could be worth around $200 to $1320 a year per household by full rollout, depending on household type and income.
It put the total consumer benefit at $12.6 billion over 20 years, with grocery prices projected to be about 3.5% lower than they otherwise would be one year after separation, and around 5% lower after six years.
"That's real money back in the pockets of New Zealanders," Willis said.
Stacks supermarket opened just a couple of weeks ago in Auckland's Sylvia Park, New Zealand's largest mall. (Source: 1News)
"More competition means supermarkets have to work harder for every customer, on price, specials, range and service. That is how shoppers get a better deal."
Break-up has risks and benefits not guaranteed - Willis
While Willis said National would "pursue" a separation and committed to a review by the Commerce Commission, she did not commit to a separation herself.
She said: "Structural separation of this scale has risks and must be done carefully.
"Whether a separation would deliver net benefits for consumers would depend on how it is implemented and what happens to supply-chain costs.
"That is why National will not have politicians playing supermarket executive from the Cabinet table, whether by ordering a breakup themselves or spending billions of taxpayer dollars trying to run a supermarket.
Under the new fast-track system, qualifying supermarkets could be consented in under a year. (Source: 1News)
"The Commerce Commission has the independent expertise to test whether the benefits for shoppers outweigh the costs and to work through how any separation would operate in practice. There is a very high bar for this kind of intervention and National is not pursuing structural separation in any other sector.
"This will be a supermarket-specific process under the Grocery Industry Competition Act.
"However, after years of reviews and incremental reform, it’s clear the status quo isn’t working. It’s time for change.
National: Owner-operators not being aimed at by policy
National made special mention of Foodstuffs owner-operators — the individual owners of New World, Four Square and Pak'nSave stores — in its announcement.
The issue was raised after a damning inquiry into Australia’s supermarkets. (Source: 1News)
“This policy is aimed at the uncompetitive structure individual Kiwi supermarkets are currently operating in, not the owner-operators who are hardworking people striving to do good by their community," Willis said.
“No owner of a Pak'nSave, New World or Four Square will be forced to sell or re-brand their business.
"Existing owner-operators would retain ownership of their businesses, continue to operate under their existing brands, and remain part of a larger group with the scale and infrastructure to support their store."
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