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Foodstuffs' North Island cooperative to merge operations

Foodstuffs' North Island cooperative to merge operations

Feb. 7 (BusinessDesk) - Foodstuffs' Auckland and Wellington cooperatives are seeking to merge their operations in a bid to bring down costs in the face of growing competition.

The move will be put towards members for a vote in coming months after an extensive business study the respective cooperatives' boards, Foodstuffs said in an emailed statement. The deal comes after Foodstuffs, which runs the New World, Pak'n Save and Four Square stores, has moved towards greater integration of its marketing and product development, it said.

Foodstuffs Auckland managing director Murray Jordan will take the lead role of the merged entity, which will be called Foodstuffs North Island. Foodstuffs South Island isn't part of the deal.

"The merger … will help keep prices down through the benefits of common systems, faster decision making, reduced costs and other benefits," said Jordan.

Foodstuffs' North Island entities account for about 43 percent of annual supermarket sales and a merged unit would trump Woolworths-owned Progressive Enterprises, which operates the rival Countdown brand stores.

Former Fonterra chairman Henry van der Heyden and Pumpkin Patch chair Jane Freeman will join the board of the merged unit as independent directors. The merger is subject to court and regulatory approval.

Foodstuffs Wellington had to back down on a controversial plan to levy a 3 percent promotions rebate from all products sold in its stores after suppliers baulked at the extra cost.

(BusinessDesk)

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