Industry and consumer submissions are being sought by the nation’s competition regulator as it mulls Foodstuffs’ plan to effectively merge its three entities into one.
The Commerce Commission has published a statement of preliminary issues relating to the application from Foodstuffs North Island Limited and Foodstuffs South Island Limited seeking clearance to merge. The two businesses jointly own Foodstuffs NZ, largely a lobbying body that is effectively a non-trading entity.
The commission has invited submissions on the plan before February 1 as it seeks to make a decision on granting clearance by March 5, but has conceded “this date may be extended as the investigation progresses”.
On the surface, there would seem to be little reason not to approve the deal – given the two merging entities operate in completely different geographical areas. However, in its statement of preliminary issues, the commission outlines all the aspects of market competition and how they might be impacted should the deal proceed. These include any effect of one party negotiating supplier terms for both the North and South Island, rather than two separate entities negotiating on their own as they do now.
“Unless we are satisfied that any lessening of competition as a result of the proposed merger is not likely to be substantial, we will not give clearance,” the commission said in its statement, which can be downloaded here under the tab “Documents”.
The paper outlines in detail all of the criteria it will consider when reaching its conclusion.