Commerce Commission takes Foodstuffs South Island to court

The Commerce Commission has initiated legal proceedings against Foodstuffs South Island, alleging that the company engaged in extensive anti-competitive behavior that limited the availability of lower prices for consumers. Foodstuffs South Island, a cooperative and the owner of New World, Pak nSave, and Four Square stores in the southern region, is accused of implementing and enforcing restrictions that prevented independently owned Pak nSave supermarkets from discounting selected products without prior approval.

The competition watchdog claims the company set a "super deal" promotion price for products and prohibited franchisees from discounting below that price unless prior consent was obtained. Additionally, Foodstuffs South Island allegedly set an "every day low price" for staple goods and prevented Pak nSaves from offering further discounts on these items without prior approval.

The Commerce Commission's chair, John Small, stated that the alleged conduct violated the Commerce Act and constituted resale price maintenance. Foodstuffs South Island responded, emphasizing that the allegations concern specific promotional programs and that the company remains committed to providing New Zealanders with the lowest prices for groceries.

Consumer chief Jon Duffy described the accusations as a form of price-fixing and noted that this case is part of a broader sector review aimed at enforcing competition rules. If successful in court, Foodstuffs South Island could face a fine of up to $10 million or 10 percent of its revenue.