Lineage Logistics Cleared To Acquire Cold Storage Nelson

The Commerce Commission has granted clearance to Lineage Logistics New Zealand (Lineage) in relation to its proposed acquisition of Cold Storage Nelson Limited (CSN).

Both Lineage and CSN are providers of cold storage services (including frozen and chilled storage and ancillary services such as blast freezing). Cold storage is used for temperature-sensitive products such as dairy, seafood, meat and frozen vegetables which require storage before they are exported, after they are imported, or (for domestically produced products) before they are distributed around the country.

The Commission’s investigation focused on the supply of cold storage services in the Waikato and Bay of Plenty regions (including Tauranga) where the merging parties most closely compete.

Chair Anna Rawlings said the Commission is satisfied that the acquisition is unlikely to substantially lessen competition in any New Zealand market for the provision of cold storage services.

“CSN has cold storage facilities in Tauranga and Lineage is building a new cold storage facility at Tauriko, and so without the acquisition we think they would be significant competitors in Tauranga. The acquisition means that this competition will not develop and we considered whether this meant the level of overall competition, in particular in Tauranga, would be adversely affected,” says Ms Rawlings.

“However, most users of cold storage facilities in Tauranga that we spoke to told us that they could switch to other providers in the Waikato/Bay of Plenty regions. Further, we are aware of new cold storage facilities being built near Hamilton, and the evidence suggests others may be interested in building new cold storage facilities if prices for cold storage services were to increase.

“Given this level of existing and potential competition, we are satisfied that the proposed acquisition is unlikely to substantially lessen competition.”

A public version of the written reasons for the decision will be available on the Commission’s case register in due course.

Background
Lineage is a multinational cold storage and logistics company with operations in Europe, North America, East Asia, Australia and New Zealand. In New Zealand, Lineage provides cold storage services in various locations including the Auckland, Waikato / Bay of Plenty, Hawke’s Bay, Canterbury and Otago regions.

CSN is a Nelson-based cold storage and logistics company, with operations in various locations around New Zealand, including the Nelson / Tasman, Waikato / Bay of Plenty and Canterbury regions.

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.

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

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