It's probably relevant that this relates to just three stores and it happened before 2015. I think we have to ask a question about what we are trying to achieve with the fine.

A $3m fine says to me that they are recognising this doesn't happen anymore, that over the last 20 years they have taken active steps to remove these covenants, and that it affected just 3 out of over 300 stores (in the North Island).

That $3m is probably in the vicinity of being a year of profit for each of the three stores affected (In 2024 Foodstuffs NI made approx $200m profit for their 300+ stores).

I know $3m doesn't seem like much but it does seem reasonable to me for these specific charges.

If we bankrupt Foodstuffs then we get a monopoly instead of a duopoly. I don't think that's in our favour.

[–] TagMeInSkipIGotThis 3 points 3 months ago (1 children)

Do Foodstuffs run the stores as separate entities to their distribution and production arms? Because figuring out the supermarket company profits is a very complicated thing. A store might only make $1m a year, but if it has to buy from the parent distributor then we also need to figure out what the profit is there as well.

[–] Dave 1 points 3 months ago

That $200m profit is reported in the financials for Foodstuffs NI. There seems to be some fonterra style coop stuff happening as Foodstuffs made a net profit of like $60m after distributions to members.

I took the number before distributions but you're right. Hell, many of the stores might have made a loss before the distribution. Many may have a profit for the store owner before the Foodstuffs NI distribution.

Like you say, it's hard to accurately track.