The Boards of Foodstuffs North Island (FSNI) and Foodstuffs South Island (FSSI) have announced they will propose to Members to bring the two co-operatives together next year as one national co-operative.
This announcement marks the start of a process between the co-operatives and their Members, which will take several months, leading to a vote on the final proposal in mid-2024.
By combining the best of each co-operative, Members can be supported by one nationwide co-operative. In recommending that a merger be considered, the Boards have been clear it must deliver meaningful benefits for customers and all its stakeholders.
If the merger is approved, the Chair and CEO designates will come from alternate co-ops.
Foodstuffs South Island CEO Mary Devine will continue to lead Foodstuffs South Island through the merger process but has elected not to be considered for the new co-operative’s CEO role.
The Boards have therefore confirmed that Foodstuffs South Island Chair Russell McKenzie will chair the proposed new co-operative’s Board, and Foodstuffs North Island CEO Chris Quin will assume the role of CEO-designate once the merger takes effect.
Russell McKenzie, Chair of Foodstuffs South Island, New World St Martins, Christchurch owner-operator.
If the proposed merger proceeds, it will continue to be a proudly 100 percent New Zealand-owned co-operative, with each store owned and operated by a local grocer. The focus on delivering the best range and value for their customers will remain the same.
“A nationwide Foodstuffs co-operative will always have significant operations and leadership capabilities in Auckland, Wellington and Christchurch. All supply chain networks serving our Members and customers will remain and operate as they do now,” said McKenzie.
“What would change is the way we’re governed and operated.”
By combining the very best ways of doing things from each co-op and forming one national business, McKenzie said that Foodsutffs have an opportunity to reduce complexity, duplication and the additional cost that comes from running two co-ops.
“Ultimately, this will make us more efficient and able to deliver more innovation and better value for New Zealanders.”
The co-operatives share strong values and trusted brands, including PAK’nSAVE, New World, Four Square, and Gilmours in the North Island, and PAK’nSAVE, New World, Four Square, Raeward Fresh, On the Spot, and Trents in the South Island.
Throughout the Commerce Commission’s Market Study into the retail grocery sector, Foodstuffs was challenged to deliver better value at the checkout. Its co-operatives have accepted that challenge and have worked more closely than ever on strategic national initiatives that improve its efficiency and competitiveness. As one co-operative, it anticipates it will be able to do this better and faster.
“An ambitious goal for the future drives this proposal. By merging, we can become the best grocery co-operative in the world, owned by the best grocery retailers and wholesalers delivering the best experience and value to New Zealanders,” said Dean Waddell, Chair of Foodstuffs North Island.
Dean Waddell, Chair of Foodstuffs North Island,
PAK’nSAVE Cameron Road, Tauranga owner-operator.
Each co-operative will hold a Special General Meeting in June next year where Members will vote on the merger proposal. The two co-ops are engaging with the Commerce Commission and seeking clearance to merge.
If the merger is approved, a carefully planned transition would occur to integrate the co-ops into one fully.
“Now is the right time to consider this. With simpler, more efficient ways of operating, we can collectively invest in our future, build resilience, be competitive, and deliver the rapid innovation and value New Zealanders deserve,” stated McKenzie.
Each co-operative is, at its core, a separate company with separate Boards, management structures, and support centres. By operationally dividing its businesses by the Cook Strait, there is duplication, complexity and additional cost.
“Combining the talent, expertise, and passion of our two co-operatives into a single, efficient organisation is the next logical step. It’ll ensure our co-operatives are in the best shape to keep improving for our customers and their communities,” said Waddell.
