Officials warned supermarket reforms might be criticised for not going far enough

Tuesday, 14 October 2025

Officials from the Ministry of Business, Innovation and Employment anticipated supermarket competition reforms unveiled by Economic Growth Minister Nicola Willis in August might be viewed as a damp squib, documents released under the OIA suggest.

The centrepiece of the reforms announced in Augustwas a change to planning rules designed to cut the red tape involved in building new supermarkets and allowing consents to be lodged under the Fast-track regime.

However, the Government kept the option of major structural reforms, such as forcing Foodstuffs and Woolworths to sell some of their stores to a new rival, in its back pocket.

Willis talked up the changes at the time, saying the Government was creating an “express lane for new supermarkets” to set up shop.

But MBIE described easier planning rules and other key ideas that had been raised by submitters during consultations to reduce regulatory barriers less effusively in a June memo that has just been released under the Official Information Act, saying they could potentially result in “marginal improvements in competition”.

The other ideas included relaxing rules around the sale of alcohol by supermarkets — which the Government has not so far decided to progress — and easing food labelling requirements, which it is looking into.

“There might be criticism that addressing these regulatory issues will only have a marginal effect on improving competition and are not going far enough,” MBIE warned in the memo.

It suggested the Government could soften any disappointment by emphasising the work it was doing enforcing existing competition rules and the consideration it is still giving to structural reforms.

Willis announced in August that she had asked officials to conduct a cost-benefit analysis on “specific options for restructuring the duopoly” that would inform future advice she intended to take to Cabinet on whether further legislative changes were required.

However, she has so far declined to spell-out what those options are, and appeared to play down the prospect of the Government forcing Foodstuffs or Woolworths to sell any of their stores.

“A decision to restructure the supermarkets was not a decision that would be taken lightly,” she said in August.

“It would be a significant intervention that would carry costs and risks that would need to be rigorously weighed against the potential benefits to shoppers.”

She told The Post on Monday she would be receiving the analysis in the coming months and wouldn’t be commenting on it until any resulting recommendations had been considered by Cabinet.

The August reforms were criticised by competition advocates as insufficient.

Sue Chetwin, spokesperson for the Grocery Action Group lobby group, said “only bold, decisive structural reform” would deliver genuine relief at the checkouts, while Labour finance spokesperson Barbara Edmonds accused the Government of dithering and “tinkering around the edges”.

Willis released seven of 19 documents that fell within the scope of The Post’s OIA request, with dozens of redactions.

They show five unnamed prospective entrants to the grocery industry were among the 24 organisations that responded to a request for information from the ministry on options to improve competition.

Some asked for financial support from the Government. Officials appeared to entertain the possibility of some such help while noting Willis had ruled out the Government stepping in to fund a state-owned “Kiwishop”.

Information on the types of funding assistance submitters sought and officials’ advice to Willis on how to respond was almost entirely redacted from the documents.