Since that report, political parties have offered a range of ideas for how to deal with it. The previous Labour government created the role of grocery commissioner, introduced new rules for how grocery chains deal with suppliers and a whistleblower tool for anti-competitive behaviour. The National-led coalition has introduced stricter penalties and stronger enforcement on fair trading and predatory pricing.<\/p>\n
The government\u2019s Fast-track Approvals Act, which passed in late 2025, included a faster consent process for new supermarket chains seeking to enter the New Zealand (super)market. Along with changes to the Overseas Investment Act and Resource Management Act, the government hoped this would encourage a third major supermarket chain to enter the market.\u00a0<\/p>\n
Nicola Willis announced a request for information to hear from potential grocery businesses, but many international chains, including Tesco, Lidl, and Aldi, declined to participate. There are still hopes that something could emerge, but the \u201cexpress lane\u201d doesn\u2019t seem to be moving very fast, which has prompted some calls for stronger action.\u00a0<\/p>\n
Nicola Willis makes announcement on grocery competition (Photo by Hagen Hopkins\/Getty Images)<\/p>\n
The Green Party\u2019s spokesperson for commerce and consumer affairs, Ricardo Men\u00e9ndez March, was the first to call for the government to break up the duopoly by forcing Foodstuffs and\/or Woolworths to split into two companies. \u201cThe government needs to break up the duopoly, force them to divest their subsidiary companies and target the corporate greed costing our communities,\u201d he said in 2024.\u00a0<\/p>\n
New Zealand First released a developed policy last week which proposes to split up Foodstuffs into two nationwide cooperatives: one for New World and Four Square, and another for Pak\u2019nSave. The policy doesn\u2019t mention Woolworths. New Zealand First also wants to empower the grocery commissioner to make binding decisions and impose penalties.\u00a0<\/p>\n
Both Labour and National governments have considered the idea<\/a> of breaking up the big two but ultimately decided against it. A 2023 analysis by MBIE<\/a> suggested forcibly breaking up the supermarkets could cost as much as $3.8 billion over 20 years, mostly due to the loss of economies of scale. It could make wholesale and distribution costs higher, which could in turn mean higher prices for consumers.<\/p>\n The problem with breaking up the supermarkets is that it causes a whole bunch of hassle having to create new supply chains and corporate systems and branding and everything that goes into starting a supermarket chain, but in the end you still have the same number of supermarkets.\u00a0<\/p>\n So what else is there? There has been some discussion about publicly-owned supermarkets<\/a> in the wake of Zohran Mamdani\u2019s New York mayoral victory but that idea is probably outside the Overton window. However, there is another overlooked option which could be both high-impact and politically feasible: zoning reform.\u00a0<\/p>\n The reason for grocery high prices isn\u2019t because New Zealand has a shortage of food. We produce a massive food surplus and have no trouble getting access to imports. The problem is a shortage of grocery stores. And the reason for that is a shortage of land to build them on.\u00a0There aren\u2019t many sites that are big enough for a supermarket and near enough customers to be viable. That makes them very expensive. Whenever a suitably large site does come up, the big two snap it up. If you ask a multinational to open 100 New Zealand stores tomorrow, their first question is going to be: where? Right now, New Zealand doesn\u2019t have the answer.\u00a0<\/p>\n Zoning rules make it harder to create new supermarket-sized plots of land. You can\u2019t just buy up a bunch of houses and build a supermarket in a residential zoned area. Some councils have aesthetic requirements and others have rules to protect particular shopping districts from competition. For example, supermarkets in Wellington\u2019s mixed-use zones must prove they won\u2019t have \u201csignificant adverse impacts<\/a>\u201d on other shopping centres. Hamilton District Council tried to stop The Base mall by Waikato-Tainui<\/a> on the grounds it would \u201cadversely impact the important role of the Central City\u201d.<\/p>\n