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Foodstuffs faces prosecution over controversial land covenants

The Commerce Commission has filed court proceedings against Foodstuffs North Island over allegations of anti-competitive land covenants.

The retailer was accused of blocking competitors from opening rival supermarkets at particular sites and developing existing ones at several locations across the lower North Island.  

The Commission and Foodstuffs have entered into a settlement to resolve the proceedings, and the High Court will determine any orders to be made in due course. 

The proceedings follow an investigation that came to light during the Commission’s market study into the grocery sector in March 2022. 

“This is a vital $25 billion sector, which impacts every Kiwi consumer,” said Commission chair John Small.

“Land covenants have the potential to harm competition by raising barriers to entry or expansion in a market, making it harder for rival businesses to compete effectively and gain scale. Ultimately, the loser here is the Kiwi consumer who is deprived of the benefits that come from a more competitive market.”

Last year, NGB Properties was penalised $500,000 over an anti-competitive covenant placed on a site close to Mitre 10 Mega Tauranga, for the purpose of preventing competitor Bunnings from opening in the area. 

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