“Foodstuffs have to come clean on who owns them,” said the Grocery Action Group (GAG).
Foodstuffs, owners of Pak’nSave, New World and Four Square, wants to merge Foodstuffs North Island with Foodstuffs South Island, but GAG has said that recent submissions to the Commerce Commission question how this could occur.
“The two organisations have entirely different structures, so how they could be ‘merged’ is very unclear,” said Sue Chetwin, GAG’s chair.
The demand follows analysis by three academics—Otago University’s Dr Rob Hamlin, University of Sydney retail and supermarket expert and Kiwi expat Lisa Asher, and Catherine Sutton-Brady of Sydney University—who said that Foodstuffs North Island has been a registered company effectively owned by just four men, none of whom own any supermarkets.
On the other hand, Foodstuffs South Island has been a grocery co-operative in the traditional sense.
The academics suggested the outcome of the proposed ‘merger’ could result in a takeover of the South Island Foodstuffs supermarkets by the company or companies owned by the four individuals.
“These revelations raise serious doubts about the extent to which Foodstuffs North Island operates as a “co-operative” as it claims and is commonly understood. Before any proposed merger can proceed, Foodstuffs needs to be far more transparent.”
Throughout its submissions to the Commerce Commission, they referred to “two co-operatives” However, how its North Island registered company is owned is unclear.
The proposed ‘merger’ has been a significant public interest, and the public deserves to know who and how they are owned.
Chetwin added that it was also challenging to see what the South Island supermarket owners stood to gain from such a deal.
In her view, the most likely outcome would be that the North Island company, controlled by the four men, would buy out the South Island supermarkets, leaving their future in utmost doubt.
“The Foodstuffs ownership is far from how our supermarkets present themselves, as locally owned co-op grocers doing good for the communities they serve.”
She said that, given that the ‘merger’ was touted to achieve efficiencies in food and grocery supply and lower prices, the recent revelations represented yet another serious breach of consumer trust.
New Zealanders pay some of the highest prices in the world for food and groceries, mainly due to a lack of competition. This research again showed how broken the food and grocery supply has been.
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