ComCom accuses Foodstuffs North Island of cartel conduct

Tuesday, 15 July 2025

Foodstuffs NI has been accused of using its leverage to dissuade one of its suppliers from dealing with a business customer direct.

The Commerce Commission says it will file charges against Foodstuffs North Island and its subsidiary Gilmours for alleged cartel conduct.

The competition watchdog has accused the businesses of using illegal means to persuade one of their suppliers not to supply goods direct to a company in the hospitality industry and to instead re-route supplies through them.

Foodstuffs NI said it “strongly denied any unlawful conduct”.

It and its stores were committed to complying with all their regulatory obligations and “co-operated fully with the Commerce Commission throughout their investigation of this matter”, a spokesperson for the supermarket group said.

Economic Growth Minister Nicola Willis reiterated the Government intended to announce by the end of September what its next steps would be to encourage more competition in the industry, but said she didn’t expect to solve that problem overnight.

Encouraging a third supermarket group to set up shop nationwide would be the best way to improve competition in the industry, she said.

But interest from international businesses in doing that had not been as high as she had liked, she said, suggesting their current focus on managing the fall-out of US tariff policies was one explanation.

“It may take time to achieve and so I've been at pains to say, in the meantime, we can't just sit back and wait for that to happen. We have to take all the other actions that we can.”

Willis said she couldn’t pre-judge the outcome of the commission’s legal action against Foodstuffs NI and Gilmours, but it was encouraging that those affected by their alleged conduct had chosen to come forward.

“New Zealand has laws against this sort of behaviour for a good reason.

The Commerce Commission says charges will be filed under both the Commerce Act and the Grocery Industry Competition Act.

“It is positive that the Commerce Commission is prepared to take a prosecution where it sees evidence that it thinks needs to be tested by the court, she said.

Willis said she hoped the prosecution sent a signal to “those who feel like they have been mistreated, that where appropriate, the Commerce Commission is prepared to take serious action”.

Commerce Commission chairperson John Small said cartel conduct harmed other businesses that were trying to compete fairly and it took allegations of such conduct very seriously.

The supplier and hospitality business — neither of which the commission has named — both did a lot of business with Foodstuffs NI, the commission said in a statement.

“The supplier wanted to provide a competitive supply channel, but this was stopped by the agreement with FSNI and Gilmours.

“We do not tolerate this kind of behaviour and will not hesitate to take court action, where appropriate.”

The charges would allege a breach of the Commerce Act and the Grocery Industry Competition Act (GICA), it said.

The maximum penalty under the relevant section of the Commerce Act is normally $10 million, or three times the value gained by the illegal activity — whichever is greater.

Grocery commissioner Pierre van Heerden said the major supermarkets groups were the largest customers for most grocery suppliers.

“This creates a reluctance for suppliers to call out bad behaviour or push back on the supermarkets for fear of damaging relationships or losing access to supermarket shelves.

“We have anonymous reporting tools for cartels and GICA and encourage anyone concerned to use these ways of contacting us,” he said.