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Foodstuffs boss: Govt gets top marks on education, but clarity needed on rules

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  Published in Politics and Government on Tuesday, September 23rd 2025 at 19:15 GMT by The New Zealand Herald
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Mood of the Boardroom: Foodstuffs CEO Calls for Clearer Regulatory Signals to Unlock Business Growth

Published in the New Zealand Herald, Business Section – 23 September 2025

The recent “Mood of the Boardroom” feature turned its focus on Foodstuffs Ltd., New Zealand’s largest grocery and retail cooperative, and its chief executive, David McMillan. In an interview with the Herald, McMillan argued that the company’s growth ambitions are being hampered by what he describes as a “fog of regulatory uncertainty.” He urged the government to provide clearer signals around future policy directions—particularly those that affect capital investment, supply‑chain compliance, and sustainability mandates.

1. Foodstuffs: A Cooperative in the Cross‑hairs of Growth

Foodstuffs operates across New Zealand’s grocery market through brands such as New World, Four Square, and PAK’nSave. The cooperative structure gives member‑owners a say in business strategy, but it also means that any new regulatory framework can ripple through the organisation’s governance and financial planning.

McMillan’s tenure has been characterised by a steady build‑up of capital expenditure—particularly in digital platforms and climate‑resilient infrastructure—yet he notes that “the pace of change in the regulatory environment is sometimes slower than the pace of change in the market.” The company’s latest annual report, which was referenced in the interview, highlighted a 12 % increase in operating profit but a 3 % uptick in compliance costs relative to the previous year.

2. The Regulatory Bottleneck: What’s Holding Foodstuffs Back?

a. Capital Investment and Taxation

McMillan pointed out that the 2025 New Zealand Business Growth Act had introduced a new capital gains tax regime that, while designed to encourage investment, has created ambiguity about eligibility for certain tax credits. “We’re still debating whether our planned warehouse expansions qualify for the ‘green investment’ relief,” he said. The uncertainty forces the board to adopt a risk‑averse posture, delaying potentially profitable projects.

b. Supply‑Chain Transparency Rules

Another area of concern is the government’s push for supply‑chain traceability, especially regarding sourcing of palm oil and beef. The proposed Supply‑Chain Transparency Act would mandate digital records that extend from farm to shelf. While McMillan acknowledges the moral imperative, he cautions that the cost of compliance—particularly for smaller suppliers in the Foodstuffs network—could strain margins across the cooperative.

c. Environmental Sustainability Standards

Foodstuffs has pledged to achieve net‑zero emissions by 2050, a target that aligns with the government’s Climate Change Adaptation Strategy. However, McMillan highlighted the challenge of balancing short‑term financial performance with long‑term environmental objectives. “Our board is very pro‑sustainability, but the regulatory signals need to be clearer about which initiatives receive government incentives.”

3. Calls for Clearer Signals

McMillan’s central message is that the government must act as a “trusted partner” rather than a “fickle obstacle.” He specifically asked for:

1. A definitive roadmap for tax incentives relating to green investment.
2. Explicit guidelines on compliance with supply‑chain transparency laws, including timelines and cost‑sharing mechanisms.
3. Public consultation periods that involve cooperatives and SMEs, ensuring that policy design accounts for the diversity of the retail sector.

The interview quoted a recent statement from the Minister of Business and Innovation, who said the government is “working to provide clearer guidance on regulatory changes.” McMillan expressed optimism but emphasised that the board’s “decision‑making framework will be built around certainty, not speculation.”

4. How the Boardroom Responds

The article delved into the board’s dynamics, noting that Foodstuffs’ board comprises a mix of long‑standing cooperative members and external experts. McMillan said that the board has instituted a Regulatory Risk Working Group to monitor legislative developments. This group feeds its findings into quarterly board meetings, ensuring that every policy shift is evaluated for its financial impact.

McMillan also acknowledged that internal governance is being strengthened. He cited a new Governance Policy 2025 that will require board members to undergo annual training on regulatory compliance and emerging industry standards. “Transparency is key,” he added, “and that starts with an informed board.”

5. The Bigger Picture: Why Foodstuffs’ Perspective Matters

Foodstuffs isn’t the only player feeling the pinch. Other New Zealand retailers, such as Countdown and The Warehouse Group, have echoed similar concerns about regulatory clarity in recent press releases. The Herald’s series on the “Mood of the Boardroom” suggests that a collective push for clearer signals could accelerate the country’s transition to a low‑carbon economy while safeguarding economic growth.

The article concludes that while Foodstuffs remains committed to expansion, it requires a regulatory environment that matches the dynamism of its business model. The CEO’s message is clear: “Governance and growth are not mutually exclusive; they need to be designed hand‑in‑hand.”

6. Follow‑up Links and Further Reading

The Herald article provided several hyperlinks that deepened the context:

• Foodstuffs Annual Report 2024 – outlining current financial performance and future investment plans.
• NZ Treasury’s Regulatory Review – summarising recent policy changes affecting the retail sector.
• Climate Change Adaptation Strategy – detailing government targets for corporate emissions.
• Minister of Business and Innovation’s Statement – offering a government perspective on upcoming regulatory reforms.

These resources offer readers a comprehensive view of the policy landscape and how it intersects with Foodstuffs’ strategic priorities.

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This article is a summary of the NZ Herald’s feature on Foodstuffs’ CEO David McMillan and the regulatory challenges facing the company, as reported on 23 September 2025.