Foodstuffs is one of the largest grocery chains in New Zealand, taking up some 55% of local grocery market share. It is jointly owned by two co-operatives - Foodstuffs North Island Limited (FSNI) and Foodstuffs South Island Limited – and the buying model issue that recently surfaced originated from the former.

According to FSNI’s briefing documents on the new model, the aim of this is to be more customer driven and data/analytics-focused – but its implementation has angered suppliers.

Consultancy firm Hexis Quadrant published analysis stating that whilst many businesses were dealing with COVID-19 fallout, they were ‘heavily leaned on’​ by FSNI with emails containing demands and threats of penalties if they did not comply with the new model despite suppliers voicing concerns about major issues such as changes in payment terms and display opportunities.

Even the local food and grocery industry representative body has voiced concerns with Foodstuffs’ methods.

“Like a lot of things in business, it’s not what you do, but how you do it.  Many suppliers were given contracts and told to sign or face the consequences,”​ New Zealand Food and Grocery Council Chief Executive Katherine Rich told FoodNavigator-Asia​.

“That was the extent of the negotiation, which isn’t really a negotiation. There was a degree of aggression and threats that was quite a step up. Many suppliers signed in good faith and now it’s up to Foodstuffs North Island to demonstrate that the new model works for suppliers.