Foodstuffs says it is still mulling its response to the Commerce Commission’s decision to block the proposed merger of its North Island and South Island co-operatives.

However, the company has already disputed some of the commission’s arguments, even suggesting the regulator does not fully understand the industry.

The grocery co-operatives own and operate more than 500 Four Square, New World, and Pak’n’Save stores across New Zealand.

Submitted in December last year, Foodstuffs said the proposed merger aims to streamline operations and reduce consumer costs.

However, the commission declined the application, stating that the companies did not adequately present that the merger would not significantly lessen competition in the market.

Chris Quin, CEO of Foodstuffs North Island, said the co-ops would carefully examine the reasonings before deciding on their next steps. 

“We strongly believe the merger is the best option for making our business more efficient, keeping checkout prices low, and ensuring we are prepared to meet new grocery competition,” he continued.

Regarding acquiring supplier partners’ markets, Quin explained that the co-ops ensured that it’s not a “three-to-two” proposition because suppliers can only supply one Foodstuffs co-op in each island. 

“Our submissions showed this merger wouldn’t reduce competition because we’re two co-ops in two separate islands. Suggestions we would coordinate with competitors are baseless.”

Foodstuffs South Island CEO Mary Devine agreed, saying the owner-operators supported the merger to enhance efficiency and agility. 

“Operating as two separate regional co-ops divided by the Cook Strait no longer makes sense. The merger will allow us to focus on our shared vision and continue evolving to become a world-class co-op,” added Devine.

Both co-ops have 20 working days to make a decision.