Commerce Commission allows yoghurt acquisition

Yoplait_YoghurtGoodman Fielder has been cleared to acquire assets related to the manufacture and distribution of ‘Yoplait’ branded yoghurt in New Zealand from Lion, says the Commerce Commission.

The decision was based on issues of competition in the national market, according to the Commission who also noted it was satisfied the merger would not substantially lessen competition in the mainstream yoghurt market.

“Currently, the mainstream yoghurt market is supplied by [Fonterra], Goodman Fielder and Lion under their respective brands Fresh ‘n Fruity, Meadow Fresh and Yoplait. While the merger reduces the number of suppliers from three to two, we are satisfied that it would not be likely to substantially lessen competition,” said Commerce Commission Chairman Dr Mark Berry.

“Fonterra is the largest supplier of mainstream yoghurt products in New Zealand and would continue to hold the largest market share when the merger proceeds.”

Berry said he believed it was unlikely that Goodman Fielder would be able to utilise this merger to raise prices, as 90 per cent of mainstream yoghurt is sold through supermarkets, with the majority of those sold through promotions.

“This means Foodstuffs and Woolworths hold significant buyer power and are able to take action to constrain or prevent price increases,” he noted.

Goodman Fielder produces a range of dairy, bread, and grocery items in New Zealand, which includes the yoghurt brands Meadow Fresh, Activate probiotic, Naturalea, Kalo, and Puhoi Valley.

Lion retains the right to manufacture and distribute Yoplait branded yogurt in Australia and other territories covered by its current licence.

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