The Commerce Commission has blocked the acquisition of Kegstar New Zealand and Konvoy New Zealand.

The proposed deal would have merged the country’s only two ‘pay-per-fill’ (PPF) keg services, something which the commission said would damage competition in New Zealand.

“Our investigation showed that there are no existing competitors that could constrain the merged entity, and that entry from a new competitor is unlikely,” said commission chair Dr John Small.

“We were not satisfied that the ability of some customers to self-supply instead of using PPF services would be sufficient to prevent an exercise of market power by the merged entity.”

The commission said it can only grant clearance for an acquisition when it is satisfied it will not have, or would not be likely to have, the effect of a substantial lessening of competition in a market.

Kegstar, a subsidiary of MicroStar Logistics, is currently having its acquisition application reviewed by the ACCC in Australia. 

“We’re concerned that the acquisition could substantially lessen competition in the supply of keg pooling services by removing MicroStar’s closest competitor,” ACCC commissioner Dr Philip Williams said. 

No conclusion on the Australian deal has been reached, the ACCC said, as the investigation has entered phase two of the review process.