Foodstuffs is denying allegations of illegal "cartel conduct"

The Commerce Commission is launching legal action against Foodstuffs North Island and Gilmours Wholesale, over alleged breaches of the Commerce Act and Grocery Industry Competition Act.

It's accusing them of persuading a major supplier to re-route business to a major hospitality customer, through them.

Foodstuffs North Island says it and its stores are committed to complying with all regulatory obligations, and co-operated fully with the Commerce Commission throughout the investigation.

It says it strongly denies any unlawful conduct.