Woolworths sells first wholesale grocer after Government recommendations

Woolworths has made its first deal to sell a wide range of wholesale groceries outside its own store brands.

The deal to sell to organic grocer Huckleberry followed a Commerce Commission investigation into the grocery sector, with recommendations for the big two supermarket chains to sell wholesale goods to smaller competitors.

Huckleberry managing director Darren Guo said the government's push for supermarkets to open up their wholesale channel was what it needed to get the negotiations rolling.

"Eating organic food shouldn't be out of reach for anyone, which is why we strive to give Kiwi shoppers access to the organic options they want, at the most competitive prices," he said.

Woolworths New Zealand (WWNZ) director Steve Sexton said the supply deal demonstrated the company's commitment to encourage more competition as its business was currently just set up to serve its Countdown, SuperValue and FreshChoice stores.

"Starting a wholesale business and all the complexity that brings isn't an easy task - but we're determined to get there," Sexton said.

WWNZ's wholesale business operated separately from its Countdown, SuperValue and FreshChoice retail supermarkets.

"We've been working hard to get this agreement in place and we are confident it will be the first of many."

He said the WWNZ would have to experiment a bit as it worked through a range of issues, from order to delivery, which it could apply to other would-be wholesale customers.

"We are currently in discussions with more than 50 retailers and other organisations who have reached out to us," Sexton said.

"The government has been really clear that it wants to see wholesale opening up so we've all got to play our part."