The Commerce Commission is taking action against Foodstuffs North Island and Gilmours Wholesale, alleging cartel behaviour

Foodstuffs is rejecting the claim.

The competition watchdog is accusing the companies of persuading a major supplier to re-route business through them, to a major hospitality customer.

Chair John Small says the Commerce Commission won't tolerate such behaviour.

Foodstuffs North Island says it's fully cooperating with the investigation, and denies any wrongdoing.