Election 2026: How the main parties plan to improve the grocery sector

The price of groceries is one of the major themes of the election campaign, as parties scramble to persuade voters they can make a meaningful difference at the checkout.

With food the top cost-of-living concern for many New Zealand households, it’s little surprise grocery policies are front and centre. It may seem like the main political parties are all announcing variations of the same policy, but there are differences in approach.

Forcing a split: National, NZ First and Greens

Forced divestment (making a major supermarket group sell part of its business) is one of the more extreme solutions to shake up the supermarket sector, but it’s not a guaranteed fix. Done badly, it could add cost rather than cut it – duplicated distribution networks, systems and infrastructure don’t come for free, and that bill lands somewhere.

Pak’nSave looks to be in the firing line as the most popular option for being split off from New World and Four Square. Foodstuffs, which operates all three brands, argues that losing shared infrastructure would increase operational costs due to the need for separate warehousing and technology, implying that this could lead to higher prices at the checkout.

The strongest case for splitting up the supermarkets is that the status quo isn’t working and they hold too much power: over suppliers, what ends up on our shelves, and how much we pay. Adding a separate player could force them to compete more aggressively on price and quality, leading to fairer prices for shoppers across the motu.

NZ First wants to split Foodstuffs into two competing cooperatives, one housing New World and Four Square and the other Pak’nSave.

National has also proposed a split of Foodstuffs brands, but with a qualifier: it would only go ahead if the Commerce Commission recommended it. Nicola Willis says National will not have politicians playing “supermarket executive from the Cabinet table”, arguing such decisions should be made by the regulator rather than ministers. The plan would leave three nationwide chains: Pak’nSave, New World/Four Square and Woolworths.

Green Party wants to force Foodstuffs and Woolworths to sell 120 stores and two distribution centres into public ownership, creating a publicly owned chain called KiwiMart. Co-leader Chlöe Swarbrick says buying existing stores is key to breaking up the duopoly.

Cracking down on excessive pricing: Greens and Labour

Fairness for suppliers and growers and affordability for shoppers are often linked. Dozens of factors set the number on the shelf, from freight and weather to global commodity price swings, and no policy can promise an exact price at the till. Right now, shoppers can’t know for sure that the prices they’re paying are “fair” because supermarket pricing is so opaque.

Some parties are proposing taking a leaf out of Australia’s book and introducing an excessive pricing rule, meaning major supermarkets could face hefty fines if found to be charging excessively high prices relative to what they pay suppliers, with penalties in the tens of millions or a set percentage of annual turnover.

Green Party was the first to propose the concept, and its version most closely follows Australia’s approach. Its law would initially ban only large supermarket companies from charging “excessive” prices, with scope to expand later to other goods and services. The party introduced a bill in August to ban excessive pricing by the supermarket duopoly (taking advantage of customers’ limited choice to charge excessively high prices), as part of its Affordable Kai policy.

Labour has a broader version. It would make it illegal for large companies with substantial market power to charge “excessive” prices for essential goods and services, or pay “unfairly low” prices to suppliers. Companies found guilty would face penalties and hand back every dollar of excess profit. The Commerce Commission would investigate dominant companies and take them to court, and consumer groups could too. The rules would apply to food, fuel, power, banking and insurance, not just supermarkets. Labour says similar rules already operate in the UK, Europe, Canada and Australia.

Which NZ supermarket has the cheapest groceries?

Find out whether Pak’nSave, New World or Woolworths has the cheapest supermarket prices – and whether specials are really saving you money.

See more

Making wholesale supply fairer: Labour and Greens

Labour is the party most focused on wholesale competition (how supermarkets buy goods from suppliers before selling them to shoppers). At the moment, Foodstuffs and Woolworths run wholesale operations alongside their retail stores, meaning they are both suppliers and retailers. Independent grocers can end up buying stock from the same companies they are competing against, while those companies can give their own stores better prices and access to products.

Labour’s policy would force Foodstuffs and Woolworths to separate their wholesale and retail operations, creating two separate wholesalers: Foodstuffs Wholesale and Woolworths Wholesale. Both groups could still own wholesale and retail businesses, but they would have to operate independently. Smaller grocers would get guaranteed access to wholesale products on fair terms, so they couldn’t be cut off from supply. Chris Hipkins said even The Warehouse has struggled to access products at competitive wholesale prices.

Green Party has given Labour’s plan tentative support, though its own headline policy is the creation of KiwiMart, a publicly owned supermarket chain, through forced divestment rather than wholesale reform.

The Commerce Commission’s recent wholesale review found competition was still weak on price, product range and access, although Woolworths had shown some improvement.

Giving the regulator more power: almost everyone

All parties want to strengthen the Commerce Commission, with the exception of ACT.

Green Party would increase the Commission’s funding, penalties and powers. It would also introduce a mandatory pricing accuracy code, with automatic compensation for shoppers who are overcharged.

Labour would give the Commission new powers to investigate dominant companies for excessive pricing and take them to court. Consumer groups could also bring cases. The powers would apply across essential goods and services, including groceries.

NZ First promises tougher penalties, faster investigations and real enforcement powers. Penalties for serious breaches would be lifted to match Australia’s, with fines of up to $10 million, three times the gain, or 10% of turnover. Supplier groups could also bring complaints to the Commission. NZ First would also create a framework for industry rules, allowing targeted action on competition problems without waiting for lengthy legislative change.

Opportunity places the most emphasis on empowering the Commission. Giving it greater independence and stronger powers to tackle excessive market power in supermarkets and other uncompetitive sectors is at the heart of the party’s policy. It would also give the Commission the legal powers and funding to pursue break-up of duopolies through the High Court.

National gives the Commission a bigger role rather than expanding its powers. Its Foodstuffs split would depend on a six-month Commission review, and it would legislate only if the Commission approved.

The Commerce Commission

The Commission already has some tools under the Grocery Industry Competition Act, including the power to impose mandatory rules on how major supermarkets supply rivals. So far, it has focused on enforcing existing obligations and testing industry-led solutions, so many of the proposed policies would depend on the Commission having the resources and powers to act more forcefully within the sector.

The flipside is it has been four years since the landmark grocery market study that called out excessive profits in the sector, yet we’ve seen very little movement on this or on market concentration.

There have been small fixes instigated by the Commerce Commission, including grocery supplier codes and changes to wholesale, but they’ve made little difference to the health of the sector. If we’re going to give the Commission the relevant powers to shake up the sector, we need it to use them.

Backing new entrants: ACT and National

ACT has the most entry-focused policy. It wants to create a one-stop consenting process for new supermarkets, so consents, liquor licenses and approvals come through a single point “in months, not years”. It would also accept food labels from several overseas regulators by default. ACT is firmly opposed to government-forced break-ups, calling break-up plans “insane” and “unethical”, and argues the focus should be on cutting red tape, making it easier for new competitors to enter the market.

National has been trying hard to entice a third major supermarket player to New Zealand, with little success so far. It has created an “express lane” for consenting new supermarkets, although no applications appear to have been lodged yet.

Giving control back to communities: Te Pāti Māori and Greens

Te Pāti Māori is running a $3.1 billion Kai Sovereignty package that would give Māori collectives Crown or council-owned land and $100 million in seed funding to set up Māori-owned supermarket chains and other retail alternatives. It would also introduce a kai tax credit for people earning $60,000 or less, worth up to eight weeks of food a year. The party says it would support about 3 million people.

Green Party also focuses on food sovereignty through its proposed National Food Strategy. It would develop the strategy with producers, distributors, public health experts, Māori and the community food sector, embedding Māori kai sovereignty principles. It would also look to prioritise local food in public procurement, protect Māori food systems including seed sovereignty, and resource a Māori-led authority to distribute start-up funding to Māori agricultural initiatives. Earlier this year it called for an urgent select committee inquiry into the closures of Heinz Wattie’s, Greggs and McCain processing facilities, arguing the closures threaten local vegetable growers and increase dependence on imported food.

The bottom line

It looks like change is coming, finally. We’ve just had years of rising food costs and the unsavoury inkling that these prices probably aren’t “fair”. What change will look like remains to be seen, and as the Pantene shampoo commercial used to say, it won't happen overnight, but it will happen.

Related articles

Consumer NZ says loyalty data for grocery discounts could push supermarket prices even higher

Suppliers say supermarket duopoly using power to squeeze margins

The new Club+ vs Everyday Rewards: Which supermarket loyalty card is better?

Australia vs NZ: Supermarket competition compared