The supermarket duopoly, and what each party would do about it

How the NZ supermarket duopoly came about

New Zealand's grocery market is split between Foodstuffs, a co-operative operating New World, Pak'nSave and Four Square, and Woolworths New Zealand. Between them they account for the overwhelming majority of grocery spending.

The Commerce Commission's market study found competition was not working well for consumers and recommended change. A Grocery Commissioner was created, but critics across the political spectrum argue the structural problem was never addressed: a third competitor cannot easily enter, because the incumbents own the sites, the supply agreements and the distribution networks.

That shared diagnosis is why you now see policies from the left and the right that both involve the state intervening in a market, which is unusual.

What the Greens would do: KiwiMart

The Green Party would force Foodstuffs and Woolworths to sell 120 stores and two distribution centres into public ownership, creating a state-owned chain called KiwiMart with a mandate to prioritise affordability rather than profit. It requires new legislation to compel the sale.

The party puts the cost at $2.8 billion, on a Parliamentary Library costing: $1.3b to buy the stores and distribution centres, and a further $1.5b to capitalise KiwiMart so it can compete commercially. It sits inside a wider 'Affordable Kai' package.

The argument is that regulation has been tried and prices did not fall, so only a competitor with different incentives will change behaviour. The counter-argument is that governments are poor retailers, that $2.8b buys a lot of other things, and that a subsidised competitor may simply lose money rather than discipline prices.

What NZ First would do: split Foodstuffs in two

NZ First would legislate to break Foodstuffs into two nationwide co-operatives by brand: one running New World and Four Square, the other running Pak'nSave, so that both compete with each other as well as with Woolworths.

It would also lift Commerce Commission penalties to match Australia, up to $10 million, three times the gain, or 10% of turnover, and give the Grocery Commissioner power to investigate, make binding decisions and impose penalties directly.

This is structural separation without public ownership: no purchase cost to the Crown, but also no guarantee the two halves compete hard rather than settling into a comfortable three-way market.

Where the other parties sit

National and ACT both favour making entry easier over forcing structural change, arguing that planning rules, consenting and land banking are what actually stop a third chain being built, and that forced divestment would deter investment.

Labour has focused on the regulatory route, strengthening the Grocery Commissioner and mandatory wholesale access rather than ownership changes.

Te Pāti Māori frames grocery prices as a cost-of-living and food-security issue, supporting intervention to bring prices down.

The quiz question that captures this asks whether the government should buy back a major bank and break up the power companies and supermarkets, which is where the split shows up most sharply.

What to weigh up

Ask yourself two separate questions. First, is the problem structural (too few competitors) or regulatory (weak enforcement)? Second, if it is structural, do you trust the state to run the competitor, or only to force the incumbents apart?

Your answer to those two determines which of these policies you find convincing, more than any figure either side quotes.