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Franchise New Zealand | Spring 2026 | Year 35 Issue 03
Anna Ryan, Barrister
www.annaryan.co.nz
Contact
Anna Ryan
021 117 4940
anna@annaryan.co.nz
Advertiser Info
Anna has extensive experience advising on the
Commerce Act and Fair Trading Act, specialising in cartel
matters and Commerce Commission investigations.
Anna Ryan
Competition & Consumer Law Barrister
Mobile: + 64 21 117 4940
Email: anna@annaryan.co.nz
Your competition
law expert
Based at Canterbury Chambers
in Christchurch, Anna acts for
clients throughout New Zealand.
She’s a member of the Franchise
Association of New Zealand and
regularly advises franchises on
Commerce Act compliance.
The Commerce Commission continues to scrutinise the franchise
sector, in August 2026 announcing its intention to bring Commerce Act
proceedings against Foodstuffs South Island in respect of alleged resale
price maintenance (RPM). RPM is prohibited by sections 37 and 38 of the
Commerce Act 1986, and occurs where a supplier of goods sets, or tries to
enforce, a minimum price at which a reseller may on-sell them.
The Commerce Commission alleges that Foodstuffs South Island applied
guidelines and rules which stopped independently owned and operated
Pak’nSave supermarkets from offering certain discounts unless they obtained
prior approval.
Specifically, the Commission alleges that Foodstuffs South Island centrally
set an ‘Every Day Low Price’, primarily for ‘shelf staple’ goods, and prohibited
Pak’nSave franchisees from applying further discounts on those products
without prior approval.
The Commission also alleges that Foodstuffs South Island set a ‘Super Deal’
promotion price for a product and prohibited franchisees from discounting
below that price without permission. Franchisees were also allegedly
prohibited from discounting any other product in the same category below
the ‘Super Deal’ promotional price.
Franchise model emphasised
In its media release about the RPM proceedings, the Commission highlighted
the fact that Pak’nSave supermarkets are a franchise network, stating, “Under
the franchise model, individual South Island Pak’nSave supermarkets are
supposed to be able to compete on pricing, discounts and promotions.”
This is not the first franchise case the Commission has pursued recently,
with civil cartel proceedings filed last year against Harcourts Group and four
of its Christchurch franchisees, alleging agreements between competing
franchisees about the prices charged to customers, including commission
rates. Although the Harcourts case concerns a different section of the
Commerce Act, the clear overall message is that the Commission is looking
closely at how pricing is coordinated within franchise networks.
RPM in the franchise setting
For franchisors, the risk of RPM arises where the franchisor (or a related
supplier) sells goods to franchisees for resale and:
• supplies goods to a franchisee on the condition that they are sold at or
above a specified price;
• induces or attempts to induce a franchisee not to discount – by threats,
pressure, or incentives offered on the condition that a price is held; or
• withholds supply, or supplies on less favourable terms, because a
franchisee has discounted or is likely to do so.
A ‘specified price’ need not be a dollar figure. A minimum margin or a limit on
discounting (e.g. “no more than 10% off RRP”) can qualify.
Franchisors that supply goods to franchisees are permitted to recommend a
retail price or set a maximum resale price, provided that the franchisee retains
the genuine freedom to set the final price it charges customers.
Potential penalties and legislative changes
RPM is illegal per se: this means that a franchisor can be liable even if there is
no evidence that the RPM harmed competition. Penalties are up to $500,000
for an individual and, for a company, the greater of $10 million, three times the
commercial gain, or 10% of turnover. And where a franchisor also competes
with its franchisees, price stipulations can raise cartel issues under section
30 as well.
At present, RPM can only be engaged in lawfully with an authorisation
from the Commerce Commission – a costly and relatively slow process.
The Commerce (Promoting Competition and Other Matters) Amendment
Bill, currently before Parliament, would add a notification regime: a
franchisor could notify the Commission of proposed conduct and proceed
unless the Commission objects, with a no-objection notice clearing the
conduct for three years. Whether the Bill passes before Parliament rises
on 24 September, ahead of the election, remains to be seen.
Be proactive
Franchise networks are no different
from any other business in that they
must comply with the Commerce Act.
A compliance review of key franchise
documentation and procedures is
comparatively inexpensive relative to
the cost of defending allegations of
anticompetitive conduct, and it is far
better to find a problem yourself than
for it to be identified in the course of a
Commerce Commission investigation.
Competition law barrister Anna Ryan
explains RPM in the franchise context
and how to ensure compliance with the
Commerce Act
RESALE PRICE
MAINTENANCE
Legal Insights