95bFM Should the government break up New Zealand's supermarket duopoly?
6 May, 2026
Interview by Pranuja Tahal, adapted by Marlo Schorr-Kon
New Zealand First has proposed breaking up one of the country’s biggest supermarket players, Foodstuffs, into two competing nationwide cooperatives. The move is being pitched as a way to increase competition in a sector long criticised for high prices and limited choice.
Emeritus Professor of Economics at the University of Auckland, Tim Hazledine, told 95bFM's The Wire that he thinks the proposal is “a great idea.”
“I don't think we can expect some whole new firm like Aldi, the German grocer, to come into our market, because we're not really big enough. So I think we've got to work with the firms we've got, and one of those is foodstuffs.”
Hazledine says New Zealand currently has three main supermarket competitors.
“We have Progressive, or Australia Woolworths, and we've got Foodstuffs North Island and Foodstuffs South Island, and they actually do operate independently on some things like sourcing their supplies from manufacturers.”
While there is the option to swap stores around so that Foodstuffs would have a presence in the North and South Islands, Hazledine says this option is “pretty complicated”.
“You've created these major distinct grocery brands, Pak'nSave, the big bulk stuff, and then the regular supermarkets and perhaps the Four Square or the other side of the market. Just work with those and break them up and make them compete with each other.”
Hazledine says this would increase competition in a more meaningful way.
“Three competitors is a lot more than two competitors. It's 50% more.”
“It's not guaranteed, but if it didn't work, we'd always tell them to go back to their old ways. They'd be good to try. A lot of debate around the supermarkets comes back to pricing.”
Hazledine says there is a high likelihood that this move will lead to lower prices for consumers.
“That's really the main reason to recommend it, is that the Commerce Commission and their report on the supermarkets a couple of years ago decided, yes, they were overcharging and there were monopoly profits in there that were increasing the cost of groceries to our households. So there's something to be done if they're right.”
Hazledine says this move has not been successfully challenged by the supermarkets.
“They don't like it, but they haven't been able to overturn that decision or that finding.”
There is also competition between independent and private manufacturers in getting their items on the supermarkets’ shelves, Hazledine says.
“Supermarkets make quite a lot of money out of their private label products because they get to keep a profit margin on the product, so if you're a small manufacturer, and you're trying to get your items on the shelves, they might say, “no, we won't stock it because we've got plenty of brands already’,
“Or they might say, ‘well, OK, we'll give you a go, but you mustn't undercut our private label brand because that's supposed to be our price leader’, which would actually be illegal.”
It appears that New Zealand is still a long way off solving the supermarket duopoly issue, as Hazledine says New Zealand is currently “not doing anything.”
“There's nothing happening. Let's hope New Zealand First is the first party to actually come out and say ‘this is on our election manifesto for this year's election, and if we are in government, we would do something about it.”
“I just hope that the other two major parties, both of them preferably, say, ‘oh, we'll do that too' but I'm so restless to wait and see when they come up with their election manifestos.”
