INDEPENDENT NEWS

Commission clears Progessive Woolworths buy

Published: Fri 13 Jul 2001 01:32 PM
Media Release
Issued 13 July 2001/84
Commission clears Progessive Enterprises to acquire Woolworths
The Commerce Commission today cleared Progessive Enterprises to acquire all the shares in Wooloworths (New Zealand) Limited. The clearance was subject to divestments of supermarkets in the Birkenhead (North Shore, Auckland) and Te Awamutu areas.
Commission Chair John Belgrave said that the Commission was satisfied that, should the proposed acquisition go ahead, Progressive would not acquire or strengthen dominance in any market.
The markets in which there would be aggregation of market share would be the markets for:
- The market for the retailing of grocery items in supermarkets, incorporating regional markets not less than 5 km in radius
- The national market for the wholesale supply of groceries.
For most areas the merged entity would face strong competition from either Pak'N Save or New World, banner groups owned by the Foodstuffs co-operatives.
In total, the Commission identified five areas where the acquisition would lead to a high degree of market concentration: These are:
* Te Awamutu;
* North Shore Auckland;
* West Auckland;
* Nelson/Stoke/Richmond; and
* Tauranga/Mt Maunganui.
"Taking all factors into account, including the divestment undertakings, we are satisfied that the proposal would not, or would not be likely to result, in Progressive acquiring or strengthening a dominant position in any market," Mr Belgrave said.
Further details will be available when public copies of the Commission's full decision are released early next week. The decision will be available on the Commission's website, www.comcom.govt.nz, and in hard copy.
Background Progressive Enterprises made its application before amendments to the Commerce Act took effect on May 26.
Before the amendments, the Act prohibited business acquisitions that resulted in dominance being acquired or strengthened in a market. The amended Act prohibits acquisitions that substantially lessen competition (SLC) in a market.
The Auckland High Court has recently ruled that the dominance test should be applied to applications which were lodged before the amendments came into force. That decision is the subject of an appeal by Foodstuffs.
ENDS

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