David Seymour says breaking up New Zealand’s supermarket groups could hurt consumers.
David Seymour says breaking up New Zealand’s supermarket groups could hurt consumers. But the research he cites, the Commerce Commission’s findings and National’s own election policy reveal a deeper disagreement over how to bring genuine competition to the grocery market.
By Webfit News Political and Business Desk | Auckland | 1 November 2026
With New Zealand’s general election just days away, ACT leader David Seymour has issued a warning against breaking up the country’s major supermarket groups, arguing that the move could increase operating costs without delivering cheaper groceries.
His comments follow new research from the New Zealand Institute of Economic Research (NZIER), which examines the risks of restructuring a grocery market dominated by Foodstuffs and Woolworths.
But Seymour’s intervention raises a question beyond supermarket prices. ACT is opposing an approach to competition reform that its own coalition partner, National, has proposed pursuing.
And while the economic risks of breaking up supermarket networks deserve serious consideration, another question remains unanswered: if the existing market is not delivering enough competition, what will actually change for shoppers?
What the Research Says, and What It Doesn’t
The NZIER research, published on 29 October, examines the potential consequences of structural changes to New Zealand’s grocery sector.
It warns that separating established supermarket operations could undermine economies of scale, including shared purchasing arrangements, warehousing and distribution networks. Those efficiencies matter in a relatively small market where transport distances and operating costs are significant.
Seymour has used those findings to argue against government-directed supermarket break-ups.
His concern is not without merit. Splitting an established network could create duplicated costs, disrupt supply arrangements and introduce uncertainty for store owners.
However, the research does not establish that preserving the existing structure will deliver better prices for consumers.
That distinction is important because efficiency and competition are not the same thing.
A supermarket group can operate an efficient distribution network while still facing limited competitive pressure to pass savings on to customers.
The Commerce Commission’s June 2026 Annual Grocery Report found that the major supermarket operators continued to control more than 80 percent of the national retail grocery market. It also identified limited overall progress in market competition.
This leaves policymakers facing two competing risks: intervention could increase operating costs, while insufficient intervention could allow existing competitive weaknesses to continue.
Neither risk disappears simply because one political party has identified the other.
Why Seymour’s Warning Is Also a Challenge to National
The political significance of ACT’s statement becomes clearer when compared with National’s own election policy.
National has proposed pursuing a separation of Foodstuffs into distinct supermarket groups, subject to a Commerce Commission assessment confirming that the benefits would outweigh the costs.
Under the proposal, PAK’nSAVE would be separated from New World and Four Square, creating additional retail groups competing alongside Woolworths.
National has also indicated that existing owner-operators would not be forced to sell or rebrand their stores.
ACT opposes this type of structural intervention. Seymour argues that government should concentrate on removing barriers preventing new supermarket businesses from entering the market.
The disagreement is substantial. National is prepared to consider changing the structure of existing operators, while ACT believes competition should primarily come from making it easier for new businesses to establish themselves.
Seymour’s statement contains an especially revealing political message.
“Our other job is locking Labour’s ideas out of National.”
That comment is notable because National’s proposal is not identical to Labour’s. Labour has emphasised separating wholesale and retail operations to improve access for independent competitors, while National has proposed a conditional separation of retail groups within Foodstuffs.
The policies differ, but both contemplate structural intervention.
Seymour is therefore doing more than criticising an opposition policy. He is drawing a clear boundary around what ACT would be prepared to support in a future coalition.
With the election approaching, the statement also reinforces ACT’s distinct economic identity at a time when the governing parties are competing for votes.
It would be speculative to claim that Seymour’s purpose is to protect supermarket profits. The public evidence does not establish that.
What is clear is that ACT is defending a less interventionist approach to competition, even where that puts it at odds with National.
Would Cutting Red Tape Really Bring Grocery Prices Down?
ACT’s alternative focuses on removing regulatory barriers that make it difficult and expensive to establish new supermarkets.
Seymour points to the Woolworths development in Halswell, which he says took 11 years to open, including four years and more than $3 million spent obtaining consent.
ACT proposes a one-stop consenting process covering planning approvals, liquor licences and other requirements. It also wants greater recognition of food labelling standards from trusted overseas markets.
These proposals address genuine concerns about the time and cost of establishing new businesses.
But obtaining permission to open a supermarket is only the beginning.
A new operator also needs access to suitable land, competitively priced products, reliable suppliers, warehousing, transport and sufficient purchasing volume to compete with established chains.
This is where the argument becomes more complicated.
The Commerce Commission has repeatedly raised concerns about wholesale supply and the difficulties smaller competitors face in obtaining products on competitive terms.
An independent retailer might secure a location and obtain every necessary approval, yet still struggle to match the prices of larger supermarket groups.
For smaller grocers, including the independent and ethnic supermarkets serving New Zealand’s diverse communities, wholesale access can be just as important as the ability to open another store.
Faster consenting may help new competitors enter the market. It does not guarantee they will be able to compete once they arrive.
That is the gap ACT needs to address if its proposals are to provide a convincing alternative to structural reform.
Four Square Owners Have Concerns, but So Do Shoppers
Seymour says he has been meeting Four Square owner-operators who are worried about the potential consequences of separating supermarket operations.
Their concerns deserve attention.
Many local store owners have invested substantial savings into businesses that depend on shared purchasing power, distribution infrastructure and established brands. Changes to those arrangements could affect their costs and operations.
However, the interests of existing store owners are only one part of the wider competition debate.
Consumers want affordable groceries. Independent retailers want fair access to products. Suppliers want reasonable commercial terms. Potential new entrants need a realistic opportunity to establish themselves.
Those interests sometimes overlap, but they are not always identical.
Protecting an established co-operative structure may help existing businesses retain operational efficiencies. Whether it also delivers the strongest possible competition for consumers is a separate question.
National’s proposal attempts to address that distinction by making any separation conditional on an independent assessment of its likely benefits.
That does not mean National’s approach will work. Structural reform could still create costs that outweigh any competitive gains.
But the existence of those risks is a reason to test the proposal carefully, not proof that the current arrangements should remain unchanged.
The Real Test Is What Happens at the Checkout
New Zealand’s supermarket debate is increasingly being presented as a choice between breaking up established businesses and making it easier for new ones to enter.
In practice, those options need not be mutually exclusive.
Regulatory barriers could be reduced while wholesale access is improved. Existing ownership arrangements could also be examined to determine whether greater separation would deliver measurable consumer benefits.
What matters is the evidence.
Parties supporting structural reform need to explain how they would protect supply-chain efficiency and avoid passing additional costs on to shoppers.
Parties opposing reform need to explain how their alternatives would overcome existing market concentration and the barriers facing smaller competitors.
The success of either approach should ultimately be measured through grocery prices, genuine competition, wholesale access and the ability of new retailers to operate sustainably.
Simply creating more supermarket brands, or approving more supermarket buildings, will not necessarily achieve those outcomes.
The Webfit News Perspective
Seymour is right to question whether breaking up supermarket groups would automatically make groceries cheaper. There is no guarantee that it would.
But the same standard of scrutiny must apply to ACT’s preferred solution. Cutting red tape does not automatically create meaningful competition in a market where established operators retain substantial advantages in purchasing and distribution.
The deeper political story is that ACT and National are offering different answers to the same problem, despite being coalition partners.
For voters, the question is not which party sounds tougher on supermarket operators or more supportive of business.
It is which proposal can demonstrate a credible path towards better competition and lower costs for households.
New Zealanders do not buy groceries according to political ideology. They pay the price displayed at the checkout.
That is where the promises made during this election campaign will eventually have to be tested.
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