A merger of the North Island and South Island Foodstuff’s cooperatives is proposed, and the Commerce Commission is now to consider granting a clearance to it under the Commerce Act. The cooperatives operate the New World, PAK’nSAVE and Four Square banners, in the North and South Islands respectively.
In order to grant the clearance application, the Commission must be satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market. The application comes after the extensive market study by the Commission into the grocery sector, which has led to law changes already, which found that competition was not working well for consumers in the sector.
A key issue therefore will be the level of competitive constraint that the two co-operatives place on each other.
More information will become available once the public version of the application is released and the Commission releases its Statement of Preliminary Issues.
Our Competition and Antitrust team will continue to monitor this application and provide further information when this is released.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.