Foodstuffs North Island has been fined $3.25 million for lodging anti-competitive land covenants to block its competitors.

Justice Radich from the Wellington High Court handed down the penalty on Thursday, describing Foodstuffs’ conduct as “deliberate” and “serious”.

Foodstuffs attempted to hinder rivals from opening new supermarkets or developing existing ones at three locations in the Lower North Island: Newtown and Petone in Wellington and Tamatea in Napier, Radich added.

Commerce Commission chair John Small said the penalty is the largest to date under section 28 of the Commerce Act, which prohibits certain land covenants that harm competition.

This reflects the seriousness of the conduct and the reason the commission pursued the court action even though land covenants are now illegal, he added.

“The covenants were of very long duration – up to 99 years – and lodged with the purpose of hindering competitors in local towns and suburbs where Kiwi consumers buy their groceries.

“By blocking other supermarkets from opening new stores or expanding existing ones, the covenants hindered competition for Kiwi shoppers,” Small elaborated.