Mike Bain/cvnznews.com
Almost 500 locally owned supermarket owner-operators from Houhoura to Stewart Island have signed open letters expressing concern about proposals to force the break-up of the Foodstuffs co-operatives.
Representing family-owned PAK’nSAVE, New World and Four Square stores across New Zealand, the signatories say the proposal raises significant questions about its actual impact on grocery prices for consumers, supply chain costs, regional communities and future investment in their family businesses.
The letters have been signed by owner-operators from both the Foodstuffs North Island and Foodstuffs South Island co-operatives and reflect concerns shared across the country about the consequences of dismantling the century-old New Zealand co-operative model.
Drawing on decades of shop-floor experience running supermarkets, the signatories say significant questions remain about how the proposal would work in practice and what it would mean for customers and communities.
Foodstuffs North Island owner-operators say the proposal misunderstands the nature of the co-operative model and support structures, which are owned by the local grocers, and risks dismantling the scale, infrastructure and support systems that help keep stores operating efficiently.
Foodstuffs South Island owner-operators have similar concerns – that breaking apart the co-operative could increase costs, create uncertainty and undermine services relied on by many regional and remote rural communities.
The family owner-operators say they support efforts to improve grocery affordability but have serious concerns about whether the proposed structural changes would achieve that outcome.
Across both letters, the grocers say Foodstuffs co-operatives are owned by local supermarket operators, and the co-operative model provides shared buying power, logistics, technology and infrastructure that individual stores could not efficiently replicate on their own.
They add that they are concerned regional and smaller communities could face greater risks and uncertainty if the co-operative model is dismantled, and significant questions remain about the costs, complexity and practical impacts of the proposal.
Open Letter from Foodstuffs North Island Grocers
Dear Prime Minister and Minister Willis,
National is proposing to break up our Foodstuffs co-op, while telling us it won’t impact our businesses, and promising customers that it will make groceries cheaper. That doesn’t add up.
We’re 320+ local families who own and run our own supermarkets. We live in the same towns and neighbourhoods as our customers. One family, one store. Together, we own the Foodstuffs co-op – the engine room that gets groceries on our shelves and helps us compete hard with each other and many other competitors for every customer dollar.
The co-op isn’t some separate corporate head office. It’s our heart, our lifeblood, our backbone.
Local grocers formed this co-op in 1922, so they could buy together to keep prices down. Our co-op still does that, giving us the scale we need, the buying power with big international suppliers, the ability to support and grow new suppliers, the warehouses, the trucks, the IT systems, marketing and the people that help us get groceries onto shelves and deliver value.
You can’t say you’re backing local grocers while taking out the engine that drives our stores. The co-op is how we serve our customers and communities. Along the way, it’s helped thousands of young people get their first job, build careers and trained all of us to run our own stores.
Customers should rightly ask how duplicating all our warehousing and support costs will lower prices. It simply won’t.
The analysis behind your own proposal says regional prices could rise. That’s hard to square with claims this will benefit customers. More than 119 of us serve towns and communities with fewer than 5,000 people. The Foodstuffs co-op model helps ensure smaller communities, like Ōtaki, Tūrangi, Wairoa, Kaikohe and Taumarunui, aren’t left paying more because they’re further from a distribution centre.
We hear you talk about Foodstuffs like it’s a simple corporate structure. That’s wrong.
We are the co-op – small and medium business owners who take on debt and risks to build good local businesses. The value of our biggest asset, our store, is completely tied to the value of the co-op.
We all want groceries to be more affordable. The way to do that is to have strong local
operators, competing hard against the international corporates.
This proposal puts our proudly locally-owned business model at risk. No matter how you spin it, this is about as far from a ‘business friendly’ policy as the National Party could get.
You say the stakes are very high and we agree. We are gutted because, as grocers, we know your policy won’t work – all the risk in this forced break-up sits with us, our customers and communities. We’re now lying awake at night wondering if we can afford to invest in our stores and our co-op’s infrastructure while this uncertainty hangs over us.
If you are serious about keeping prices down at the checkout, you should be backing Kiwi owned businesses and the Foodstuffs co-op we built together, not pulling it apart.
PAK’nSAVE owner operators
New World owner operators
Four Square owner operators
Gilmours owner operators
North Island/Te Ika-a-Māui
