Statement Of Issues Released For Fletcher Application To Acquire Six Tumu Stores And A Frame And Truss Plant

The Commerce Commission has published a statement of issues relating to an application from Fletcher Distribution Limited (FDL), (a wholly-owned subsidiary of Fletcher Building Limited), seeking clearance to acquire six building products stores, and a frame and truss manufacturing plant, from Tumu Merchants Limited (Tumu).

The six Tumu stores (which until recently operated under the ITM banner) are located in Gisborne, Napier, Hastings, Havelock North, Dannevirke and Masterton. The frame and truss manufacturing plant is located in Hastings.

The Statement of Issues outlines the Commission’s potential competition issues with the acquisition following its initial investigation. The Statement of Issues is not a final decision and does not mean that the Commission intends to decline or clear the proposed acquisition.

The Commission is seeking submissions from FDL, Tumu and other interested parties on the issues raised in the Statement of Issues.

The Statement of Issues will be available on the case register shortly.

Submissions can be sent by email to registrar@comcom.govt.nz with the reference "FDL/Tumu” in the subject line.

Submissions are due by close of business on 30 June 2022, with cross-submissions due by close of business on 11 July 2022.

The Commission is currently scheduled to make a decision on the application by 28 July 2022. However, this date may be extended.

Background
We will give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market. The test under section 47 focuses on whether existing competition is likely to be substantially lessened as a result of an acquisition in any relevant market related to that acquisition.

This is a different analysis to that being undertaken in the Residential Building Supplies Market Study, which is considering the factors that may affect competition for the supply or acquisition of key building supplies. The market study looks at whether competition for key building supplies is working effectively and, if not, why not and how competition could be improved.

The preliminary views we have reached in relation FDL’s application are specific to the facts of this acquisition and whether competition in the affected regions would be lessened substantially by it. Our work on the Residential Building Supplies Market study is ongoing and will consider a range of matters in addition to competition at a merchant/distribution level. The preliminary views we have reached in relation to this proposed acquisition should not be taken as indicating the views that we may come to as part of the market study.

Further information explaining how the Commission assesses a merger application is available on our website.

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