Caption: The Chairs of Foodstuffs co-ops talk about the proposal to bring the co-ops together. Russell McKenzie, New World St Martins, Christchurch owner-operator (left) Dean Waddell, PAK’nSAVE Cameron Road, Tauranga owner-operator (right).

The Boards of Foodstuffs North Island (FSNI) and Foodstuffs South Island (FSSI) have today announced they will be putting a proposal to Members to bring the two co-operatives together next year as one national co-operative.

Today’s announcement marks the start of a process between the co-operatives and their Members which will take several months, leading to a vote on the final proposal in mid 2024.

By combining the best of each co-operative, our Members can be supported by one nationwide co-operative. In recommending that a merger be considered, the Boards have been clear it must deliver meaningful benefits for customers and all our stakeholders.

If the merger is approved, the Chair and CEO-designates will come from alternate co-ops.

Foodstuffs South Island CEO, Mary Devine will continue to lead Foodstuffs South Island through the merger process but has elected not to be considered for the new co-operative’s CEO role.

The Boards have therefore confirmed that FSSI chair, Russell McKenzie will chair the proposed new co-operative’s Board and Foodstuffs North Island CEO, Chris Quin will assume the role of CEO-designate once the merger takes effect.

“If the proposed merger proceeds, we’ll continue to be a proudly 100% NZ-owned co-operative with each store owned and operated by a local grocer. Their focus on delivering the best range and value for their customers will not change.

“A nationwide Foodstuffs co-operative will always have significant operations and leadership capabilities in Auckland, Wellington and Christchurch. All supply chain networks serving our Members and customers will remain and operate as they do now.

“What would change is the way we’re governed and operated. By combining the very best ways of doing things from each co-op and forming one national business, we have an opportunity to reduce complexity, duplication and the additional cost that comes from running two co-ops. Ultimately, this will make us more efficient and able to deliver more innovation and better value for New Zealanders,” says Russell McKenzie, Chair of Foodstuffs South Island.

Caption: Russell McKenzie, Chair of Foodstuffs South Island, New World St Martins, Christchurch owner-operator.

The co-operatives share strong values and trusted brands including PAK’nSAVE, New World, Four Square, and Gilmours in the North Island, and PAK’nSAVE, New World, Four Square, Raeward Fresh, On the Spot, and Trents in the South Island.

“Throughout the Commerce Commission’s Market Study into the retail grocery sector, we were challenged to deliver better value at the checkout. Both our co-operatives have accepted that challenge and have been working more closely than ever on strategic national initiatives that improve our efficiency and competitiveness. As one co-operative, we can do this better and faster.

“This proposal is driven by an ambitious goal for the future. By merging we can become the best grocery co-operative in the world, owned by the best grocery retailers and wholesalers delivering the best experience and value to New Zealanders,” says Dean Waddell, Chair of Foodstuffs North Island.

Caption: Dean Waddell, Chair of Foodstuffs North Island, PAK’nSAVE Cameron Road, Tauranga owner-operator.

Each co-operative will hold a Special General Meeting in June next year where Members will vote on the proposal to merge. The two co-ops are engaging with the Commerce Commission and seeking clearance to merge.

If the merger is approved, a carefully planned transition would take place to fully integrate the co-ops into one.

“Now is the right time to consider this. With simpler, more efficient ways of operating, we can collectively invest in our future, build resilience, be competitive, and deliver the rapid innovation and value New Zealanders deserve,” says McKenzie.

“Each co-operative is, at its core, a separate company with separate Boards, management structures, and support centres, but by operationally dividing our businesses by the Cook Strait, there is duplication, complexity and additional cost.

“Combining the talent, expertise, and passion of our two co-operatives into a single, efficient organisation is the next logical step. It’ll ensure our co-operatives are in the best shape to keep improving for our customers and their communities,” says Waddell.