The Commerce Commission of New Zealand has announced it will file civil proceedings against Foodstuffs South Island Ltd (FSSI) for alleged anti-competitive conduct. The Commission claims that FSSI enforced restrictions on independently owned PAK’nSAVE supermarkets, preventing them from discounting certain products without prior approval.

According to Commerce Commission chair Dr. John Small, this conduct deprives consumers of competitive pricing and limits the ability of individual supermarkets to compete effectively. The Commission argues that FSSI's guidelines constituted resale price maintenance, which is illegal under section 37 of the Commerce Act.

FSSI is accused of implementing a 'Super Deal' promotion price that franchisees could not discount below without approval, as well as prohibiting discounts on other products in the same category. Additionally, FSSI set an 'Every Day Low Price' for staple goods, restricting further discounts unless prior approval was obtained.

The Commission asserts that these alleged practices were widespread and affected all South Island PAK’nSAVE franchisees for several years. As the legal proceedings are set to commence, the Commission has refrained from further comments on the matter.