Pitched as a way to crack open New Zealand's grocery market and bring food prices down for shoppers squeezed by a two-player duopoly.

The Policy: NZ First Supermarket Competition Policy — April 2026 →

NZ First announced this campaign policy on 19 April 2026. It is a stated intention, not a law: the party says that in government it would legislate to restructure the sector and arm the regulator with much sharper teeth.

What it does:

• Splits Foodstuffs into two nationwide cooperatives that would compete against each other and against Woolworths — one holding the New World and Four Square brands, the other holding Pak'nSave — turning today's effective duopoly into a three-way contest.
• Targets a market where Woolworths and Foodstuffs together hold about 82% of grocery sales, barely down from 84% in 2020, and which the Commerce Commission's 2022 market study found was earning the big chains roughly $1 million a day in excess profits.
• Lifts maximum penalties for breaches to Australian levels — up to $10 million, three times the commercial gain, or 10% of turnover — and rebuilds the Grocery Commissioner role (created by Labour in 2023) so the regulator can investigate, make binding decisions and impose penalties directly rather than issue warnings.
• Adds a "farm-to-shelf" framework under the Commerce Act 1986 to stop dominant players controlling shelf access and squeezing suppliers, citing a gap NZ First illustrates with growers paid around 60c/kg for peas that retail near $5.79/kg.

The result: As an opposition campaign pledge, none of this is enacted, and the central idea — forced structural separation — is contested even among people who agree the market is broken. Supporters point out the duopoly has proved durable: the Commerce Commission's 2026 annual report found little change in competition after three years of reform, with Consumer NZ chief executive Jon Duffy calling that a sign no progress is being made and itself backing structural separation. The current government has not ruled separation out: Finance Minister Nicola Willis commissioned a cost-benefit analysis of restructuring the incumbents. But critics question whether splitting Foodstuffs would actually help. ACT leader David Seymour argued that breaking up a New Zealand-owned cooperative would mainly benefit its Australian-owned rival Woolworths, saying it hardly sounds like putting New Zealand first. Monopoly Watch spokesperson Tex Edwards welcomed the debate but said a split is not a solution on its own, arguing the real problem is the wholesale and distribution-centre architecture rather than the number of stores. The New Zealand Initiative's Dr Benno Blaschke argued the binding constraints are planning rules and site scarcity that block new entrants, and that a forced break-up would duplicate logistics, strand assets and risk pushing prices up. Foodstuffs says splitting its cooperatives would reduce efficiencies and that the cost would flow through to checkout prices.

The impacts to watch:

• Whether a Foodstuffs split increases real competition or simply hands market share to Woolworths, given international chains such as Aldi, Lidl and Tesco have so far declined to enter the New Zealand market.
• The cost and disruption of restructuring: MBIE analysis cited in reporting put the potential cost of forced separation at up to $3.8 billion over 20 years from lost economies of scale.
• Whether prices for shoppers actually fall, against a backdrop where annual food prices rose 4.6% in the year to January 2026 and the grocery food group was the biggest contributor.
• Whether sharper Commerce Commission powers and a stronger Grocery Commissioner change supplier and shelf-access behaviour even if the structural split never happens.