The Commerce Commission (Commission) has just released its latest enforcement priorities for 2026/2027. The grocery sector also remains firmly in the Commission’s focus, with recent reports and enforcement activity highlighting ongoing competition concerns.

These priorities have been consistent over a number of years now - the exception being that non notified mergers has now been added to the list of enduring priorities suggesting a greater focus on this issue going forward.

In addition to these enduring priorities, the Commission's specific priorities for 2026-27 are:

• Cartels in public procurement;

• Online sales conduct;

• Breaches in the grocery sector;

• Pricing and promotional practices;

• Exclusive arrangements that impact competition - such as limiting access to customers or suppliers.

The latter two specific priorities replace three of last year’s specific priorities which involved breaches in the telecommunications sector, motor vehicle sales and finance, and unconscionable conduct.

Alongside these priorities, the Commission has highlighted its increased litigation appetite, with the current litigation threshold 50% above historic norms, and recognised education and outreach as tools to get ahead of harm. It has also welcomed upcoming amendments to the Fair Trading Act 1986 that will increase maximum penalties from $600,000 to $5 million per breach.

Latest grocery sector findings

The Commission has sent a clear signal that, while it does not intend to introduce new grocery regulation, it intends to prioritise enforcement of existing grocery regulation.

Recent enforcement activity reflects that focus, including investigations, warning and compliance letters, initiated proceedings relating to alleged cartel conduct, inaccurate and misleading pricing, breaches of the Grocery Industry Competition Act (GICA), and the use of corrective notice powers to ensure proper reporting.

What has happened over the last year?

The updated Grocery Supply Code, which came into force on 1 May 2026, aims to create a fairer and more certain trading environment between regulated grocery retailers (RGRs) (ie Foodstuffs North Island, Foodstuffs South Island and Woolworths New Zealand) and suppliers. Key changes include new protections for suppliers relating to wastage charges and promotional funding, a standalone prohibition on RGR retaliation against suppliers that exercise their rights or engage with the Commission, and enhanced record-keeping requirements to support enforcement.

The Commission has closed its Wholesale Supply Inquiry and confirmed that it will not recommend additional wholesale regulation at this stage. Instead, it considers that industry-led improvements, supported by enforcement of the existing regime, are the most appropriate way to improve wholesale competition. While the Commission acknowledged steps taken by Woolworths to strengthen its wholesale offering, it found that competition remains weak across wholesale pricing, range and access, and noted that Foodstuffs North Island and Foodstuffs South Island have made less progress. The Commission has indicated it will continue to monitor the sector and may revisit further intervention if competition does not improve.

In addition to the Wholesale Supply Inquiry Closure Report, the Commission has published the third Annual Grocery Report and second Grocery Supplier Survey Report. These three reports provide an updated assessment of competition in the grocery sector and supplier experiences under the current regulatory regime. Key findings include:

• Competition remains weak: The RGRs continue to account for 82% of grocery sales and food price inflation increased by 4.6% in 2025. The Commission considers that significant barriers to effective competition remain despite some signs of entry and expansion by smaller retailers.

• Rebates, payments, and discounts (RDPs) remain a key competition concern: RDPs were estimated to total approximately $6 billion in 2025, representing 26% of combined RGR sales revenue. Supplier use of RDPs continues to increase, with many suppliers reporting that these arrangements are typically initiated by RGRs. The Commission considers that limited access to RDP benefits are a significant constraint on wholesale customers' ability to compete effectively with the RGRs.

• Wholesale customers also face non-price barriers to entry and expansion: The Commission identified ongoing concerns with wholesale access, including insufficient access to and availability of product range, difficulties obtaining competitive wholesale terms, and a lack of transparency around the pass-through of RDP benefits. While recent reforms may help, the Commission considers that improvements will take time.

• Ongoing imbalance in bargaining power between RGRs and suppliers: 83% of suppliers reported experiencing issues with RGRs in the past year and confidence in negotiating with RGRs has declined since 2024. Common concerns included pricing, delisting decisions, communication, access to data and insights, and stock availability. The survey also found that many suppliers continue to favour direct supply relationships over supplying through wholesale channels.

• Consumer-focused reforms continue to be rolled out: Online grocery sales increased from 7% to 8% of RGR sales revenue in 2025, with click-and-collect overtaking delivery, as consumers continue to be driven by price and convenience. The Commission also highlighted several initiatives aimed at improving consumer outcomes, including the Consumer Complaints Disclosure Standard, updated refund policies, unit pricing requirements, price comparison tools, and ongoing Fair Trading Act enforcement.

Get in touch

If you would like to understand what these changes and updates mean for your business, please get in touch with one of our consumer, regulatory and competition team members.

Special thanks to Lucy Reilly, Charlotte Fox and Jenna Bernstein for their assistance in preparing this update.