Foodstuffs North Island and Foodstuffs South Island are disappointed by this week’s announcement by the Commerce Commission that it has decided not to grant clearance for them to merge into one New Zealand-owned national grocery co-op.
The two 100% New Zealand-owned co-operatives put forward their application to merge in December last year.
The co-ops share ownership of some of the country’s most-trusted grocery brands, PAK’nSAVE, New World, Four Square, and Pams, as well as Raeward Fresh and On the Spot in the South Island. Foodstuffs North Island also owns the wholesale brand Gilmours, while Foodstuffs South Island owns wholesale brand Trents.
Foodstuffs North Island CEO Chris Quin said the merger is a once-in-a-generation opportunity for Foodstuffs to position the co-operatives to meet the challenges of a fast-evolving market.
“This merger is about bringing together the back-end support functions of our two regional co-ops to become more efficient and competitive, so we can better serve our customers. That’s good for everybody,” said Quin.
“For around a century our co-ops have taken the lead in adapting to changing consumer preferences, facing economic challenges, dealing with crises and finding new ways to deliver value and innovation at the checkout.
“The merger proposal continued that legacy and is an important step for us to keep delivering the best value and experience to customers nationwide.
“We know affordable groceries matter to New Zealanders, and we’ve worked hard to tame food price inflation over the past two years. Being one national co-op would allow us to do more.
“We remain convinced that merging is the right thing to do for our customers, our 500-plus members and for New Zealand.
“This process is about a legal test, and we were confident in putting forward our proposal that it satisfied the legal test. While we’re disappointed with the decision, we’ll await the Commerce Commission’s full reasoning and take time to review it before we decide our next steps,” said Quin.
In June the two co-ops’ owner-operators voted overwhelmingly in support of the proposed merger.
“It was a clear sign that both co-ops were united in our vision for the future and committed to delivering the benefits,” said Foodstuffs South Island CEO Mary Devine.
“By joining forces, we would be better equipped to invest in new technology, streamline how we operate and bring fresh ideas to both in-store and online shopping.
“The merger would help us stay ahead of global industry trends, adapt quickly to disruptions, improve how we partner with our suppliers, and continue to serve our communities with the same dedication and excellence that has always defined us.
“Operating as one national business, like our main local and global competitors do, just makes a lot more sense.
“We remain committed to being world class co-ops, and laser focused on delivering for our customers across the country.
“Our connection to the communities we serve will continue to be the driving force behind everything we do,” said Devine.
The current co-operative structures remain in place, with the Boards and management teams focused on leading the co-ops through the busy summer trading period.
