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Commission Clears P&O Cold Logistics...

Commission Clears P&O Cold Logistics To Acquire Some Of Eskimo Logistics Assets

The Commerce Commission today cleared P&O Cold Logistics (NZ) Limited to acquire the refrigerated warehousing assets of Eskimo Logistics Group Limited.

The possible acquisition considered does not include the freight forwarding business or cold storage facilities of Eskimo's subsidiary Eskimo International Limited.

Commission Chair John Belgrave said that the Commission is satisfied that, should the proposal go ahead, P&O would not acquire or strengthen a dominant position in any market.

P&O Cold Logistics is involved in the provision of refrigerated warehousing and distribution services to suppliers of perishable goods, in particular food retailers and manufacturers.

The principal business of Eskimo is the provision of refrigerated distribution and ancillary services to primary producers and wholesalers and to manufacturers, retailers and marketers of perishable food products.

Mr Belgrave said that the Commission is aware that both companies are large players in the relevant markets, but it is satisfied that there are sufficient constraints to prevent dominance being acquired or strengthened. The main factors preventing dominance are: * existing competitors and their ability to expand * potential new entry * the ability of customers who are manufacturers to revert to in-house distribution, and * the countervailing power of the supermarket chains.

Background

When parties apply for clearance of a business acquisition, the Commission must determine what markets are relevant to the proposal, and then assess what impact the proposal would have on competition in those markets.

The Act prohibits business acquisitions that result in dominance being acquired or strengthened in any market. The Commission will give a clearance if it is satisfied that dominance would not be acquired or strengthened.

Public copies of the Commission's decision will soon be available from its website, www.comcom.govt.nz, and in hard copy from reception at its Wellington office, Level 7 Landcorp House, 101 Lambton Quay.


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