Supermarket competition
We are working across government to improve competition in the grocery sector.
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Our work programme
Between March and May 2025, the Government ran a Request for Information (RFI) process to hear from investors and prospective grocery market competitors about possible barriers to entry and investing and growing at scale in the market. 24 responses were received from a mix of existing companies, prospective competitors, advocacy groups and other interested parties. These responses were provided in confidence and will not be publicly released due to commercial sensitivity.
The Request for Information informed development of a work programme on grocery competition with 3 streams:
- Enforcement: strengthening fair trading and competition legislation to deter anti-competitive behaviour and promote the interests of consumers.
- Regulatory: reducing regulatory barriers to make entry and growth of retailers easier and more attractive.
- Structural: investigating the costs, benefits and risks of restructuring the incumbent retailers in order to promote competition.
Workstream 1 – Enforcement
RFI respondents noted the major incumbents use their market power to prevent potential competition.
Concerns have been raised in relation to inaccurate and misleading grocery pricing and specials.
Increasing Fair Trading Act penalties
Maximum penalties for serious breaches of the Fair Trading Act are being increased. Penalties for breaching most provisions, including misleading and deceptive practices, will increase to the greater of:
- $1 million for individuals or $5 million for businesses;
- 3 times the commercial gain; or
- the value of consideration from the transaction(s).
The penalties are being brought in line with penalties for similar offences under the Financial Markets Conduct Act to ensure the right incentives are in place for businesses to trade fairly, including that prices are accurate. Increased penalties will apply to all businesses and sectors, including supermarkets.
Commerce Act changes
New, sector-wide, predatory pricing measures are proposed to prevent dominant firms from implementing sustained aggressive pricing strategies to drive smaller competitors from the market.
Predatory pricing measures are being proposed through a wider set of competition reforms aimed at strengthening New Zealand’s competition framework under the Commerce Act.
Refreshing competition settings
Workstream 2 – Regulatory
RFI respondents identified a range of regulatory issues, particularly around slow and complex consenting processes. The Government has taken 3 key actions to create an express lane for building new supermarkets in New Zealand.
Fast-tracking resource consent for supermarket developments
The Government has passed the Fast-track Approvals Amendment Bill to make it clear that grocery developments that will improve national or regional competition can access fast-track approval processes.
Grocery developers will be able to apply directly to the Minister for Infrastructure for referral to a centralised fast-track expert panel for efficient consent decisions. This includes supermarket developers, and developers of grocery distribution businesses or wholesale infrastructure.
These changes are supported by a new Government Policy Statement on Grocery Competition describing how a grocery project could meet the Government’s objectives to improve grocery competition. The Government Policy Statement outlines what fast-track decision makers must consider when evaluating eligibility for grocery developments. It notes that the Government’s focus is on supporting:
- projects of scale that lessen market concentration
- businesses that can compete with broad product range offerings
- innovative business models and new formats that currently are underrepresented
- multi-region or multi-site developments
- one-off developments that help directly or indirectly with strengthening competition against the well-established retailers.
Read the Government Policy Statement on Grocery Competition:
Government Policy Statement on Grocery Competition(external link) — New Zealand Gazette
Read more about fast-track consenting:
Delivering infrastructure and development projects(external link) — Fasttrack.govt.nz
One building consent process for supermarkets
Christchurch City Council has been selected to manage building consents for new supermarkets across New Zealand.
Grocery store developments larger than 500m² anywhere in New Zealand are now able to choose to apply directly to Christchurch City Council (CCC) for building consent.
This single building consent process aims to deliver a more predictable and efficient pathway for new entrants seeking to establish standalone supermarkets.
More information on eligibility for this service is available on the Building Performance website:
Centralised supermarket building consent service to boost grocery competition(external link) — Building Performance
Expanding MultiProof eligibility
Supermarket developers are now able to more easily apply for MultiProof approvals to enable replicable designs to be easily built across the country.
With MultiProof approval, nationwide developments will benefit from a faster building consent process. Building consent is still required for MultiProof approved designs, but this is limited to addressing site-specific features such as foundations and site services, and must be completed within 10 working days instead of 20.
The following eligibility requirements have been removed for all developments, including supermarkets:
- Requirement for applicants to build the approved design at least 10 times over 2 years, provided the design is still intended to be replicated.
- Requirement for applicants to intend to build themselves.
More information about MultiProof is available on the Building Performance website:
MultiProof(external link) — Building Performance
Product labelling review
The Government also sought expressions of interest to trial digital labelling solutions that may make it less costly to import overseas food products.
Digital food labelling trial(external link) — Ministry for Primary Industries
Enabling overseas investment
To help navigate regulatory requirements, Land Information New Zealand published updated guidance on the pathways available for overseas grocery firms to meet obligations under the Overseas Investment Act. This guidance is available on the Toitū Te Whenua Land Information New Zealand (LINZ) website.
This is on top of wider work the Government has progressed to encourage overseas investment across the economy, including through changes to the Overseas Investment Act.
Grocery sector investments under the Overseas Investment Act 2005(external link) — Toitū Te Whenua Land Information New Zealand
Reform of the Overseas Investment Act(external link) — Toitū Te Whenua Land Information New Zealand
Workstream 3 – Structural
Some RFI respondents advocated for a restructure of the retail grocery market that would restructure Foodstuffs and/or Woolworths.
An independent cost-benefit analysis (CBA) was completed to investigate the costs, benefits and risks of restructuring the incumbent retailers in order to promote competition.
The Government will not be advancing any of the policy options contained within this analysis. However, given the public interest in this work, the Government has decided to release the analysis. MBIE is not consulting or seeking feedback on the analysis or the policy options it covers at this time.
View the CBA and associated peer reviews of the analysis.
Release of CBA into restructuring the grocery sector
Contact
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