Supermarket operator Woolworths New Zealand could soon be withdrawn from sale by its Hong Kong based parent, Dairy Farm, after the New Zealand Commerce Commission ruled that Australian company Foodland could not bid for the chain.

The competition regulator's recent decision blocked a generous bid from the Perth-based grocer, who sought to buy out the 80-strong chain in order to protect its interests in the country from competition. Foodland already operates the Deka department stores in New Zealand, but Woolworths Australia was reportedly mulling an offer for Woolworths New Zealand.