Foodstuffs merger appeal kicks off at the High Court
Monday, 2 March 2026
Supermarket operator Foodstuffs has begun its appeal against the decision by the Commerce Commission to refuse clearance for it to merge its North and South Island operations, which are separate businesses.
The commission declined to approve the merger in September 2024, after deliberating over the matter for almost a year.
Foodstuffs North Island and Foodstuffs South Island had announced the following November they intended to appeal the decision.
That appeal is now underway at the High Court in Wellington, where it is being heard by Justice Andru Isac and lay member of the court Lilla Csorgo, who is also chief economist of the Australian Competition and Consumer Commission.
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Commerce Commission chairperson John Small said in 2024 when the watchdog rejected the merger that it was not satisfied it wouldn’t substantially lessen competition, even though there was no overlap between the footprints of the two firms’ supermarkets.
Small indicated its main concern was the potential impact on supermarket suppliers, saying the merger would reduce the number of major buyers of grocery products from three to two and result in the merged entity having “greater buyer-power than Foodstuffs North Island and Foodstuffs South Island had individually”.
However, the commission also argued the merger could make collusion between Foodstuffs and Woolworths easier and might make it harder for rivals to break into the supermarket industry or to expand.
Foodstuffs North Island chief executive Chris Quin has argued the merger would create efficiencies that would mean cheaper groceries for consumers.
Foodstuffs NI simply wanted the opportunity to be a national business “like every other New Zealand business of any size”, he said when initially announcing the appeal.
The case is set down for a week-long hearing at the High Court which commonly reserves its rulings, meaning it may be months before the outcome of the appeal is known.
Only two of the rulings the commission has made under the current merger regime have ultimately been successfully appealed, and none in the past 20 years.
Most recently, in 2003, the High Court reversed the commission’s block on Brambles NZ acquiring plastic crate supplier GE Capital Returnable Packaging Systems.
Appearing for Foodstuffs at the High Court today, Jenny Cooper KC said Foodstuffs would have the incentive to continue to compete “just as strongly as they do now on the full spectrum of price, quality, range and service”.
“If they don’t do that, there is likely to be a competitive reaction from one of their competitors, whether that is Woolworths, The Warehouse, specialty stores or Costco.”
The court had full power to reverse the commission’s ruling and was not required to give deference to the commission’s expertise as it was also an “expert tribunal”, she said.
Cooper emphasised what has always been an important point for Foodstuffs, which is that the cooperatives already operated “as a single set of brands with a consistent brand proposition, so they have very clean market positioning and messaging which is consistent, and there is extensive communication between them”.
Csorgo indicated she was interested in whether Foodstuffs could still gain “monopsony power” — meaning greater market power in its negotiations with grocery suppliers — even though the addressable customer bases of the supermarket businesses would be the same post-merger, flagging what may be be an important but complex topic of contention in the appeal.
Cooper said an increase in bargaining power was “not, per se, harmful”.
A “transfer of benefit” from suppliers to consumers would generally be regarded as pro-competitive, she suggested.
“Which is not to say negative impacts on suppliers are necessarily irrelevant. The question is whether they would lead to a long-term reduction in competition.”
The commission made clear in January that it intended to take a closer look at declining product choice in supermarkets after releasing figures that indicated they were stocking thousands fewer products than they were a few years ago.