Supermarkets Have To Come Clean On Who Owns Them - GAG

Foodstuffs has to come clean on who owns them, the Grocery Action Group (GAG) says.

Foodstuffs, owners of Pak’nSave, New World and Four Square, wants to merge Foodstuffs North Island with Foodstuffs South Island, but GAG says recent submissions to the Commerce Commission question how this could occur.

“The two organisations have entirely different structures so how they could be ‘merged’ is very unclear,” said Sue Chetwin, GAG’s chair.

The demand follows analysis by three academics - Otago University’s Dr Rob Hamlin, University of Sydney retail and supermarket expert and Kiwi ex pat Lisa Asher, and Catherine Sutton-Brady of Sydney University - who say Foodstuffs North Island is a registered company effectively owned by just four men, none of whom own any supermarkets.

On the other hand, Foodstuffs South Island is a grocery co-operative in the traditional sense.

The academics suggest the outcome of the proposed ‘merger’ could result in a takeover of the South Island Foodstuffs supermarkets by the company or companies owned by the four individuals.

“These revelations raise serious doubts about the extent to which Foodstuffs North Island operates as a “co-operative” as it claims and as is commonly understood,” Chetwin said.

“Before any proposed merger can proceed Foodstuffs needs to be far more transparent.

“Throughout its submissions to the Commerce Commission they refer to “two co-operatives” but how its North Island registered company is owned is far from clear.

“The proposed ‘merger’ is a matter of major public interest and the public deserves to know who and how they are owned.

“It’s also difficult to see what the South Island supermarket owners stand to get out of such a deal.

“In our view the most likely outcome would be the North Island company controlled by the four men would buy out the South Island supermarkets leaving their future in utmost doubt.

“The Foodstuffs ownership is far from how our supermarkets present themselves, as locally owned co-op grocers doing good for the communities they serve.

“Given that the ‘merger’ was held out to be in the interests of achieving efficiencies in food and grocery supply, and lower prices, the recent revelations represent yet another serious breach of consumer trust.

“New Zealanders are paying some of the highest prices in the world for food and groceries and that is largely due to a lack of competition.

“This research shows again how broken our food and grocery supply is.”

The submissions referred to are at the links:

https://comcom.govt.nz/__data/assets/pdf_file/0020/362252/Dr-Robert-Hamlin-submission-in-response-to-FSNI-and-FSSI-statement-of-unresolved-issues-29-August-2024.pdf

https://comcom.govt.nz/__data/assets/pdf_file/0022/362281/Lisa-Asher-cross-submission-in-response-to-FSNI-and-FSSI-statement-of-unresolved-issues-updated-29-August-2024.pdf

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