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Progressive’s Response To Foodstuffs’ Legal Tactic

June 11, 2001
Progressive’s Response To Foodstuffs’ Legal Tactics

Progressive Enterprises Limited today responded to Foodstuffs (Auckland) Limited’s announcement it intends to take the Commerce Commission to the High Court over Progressive’s application to merge with Woolworths (New Zealand) Limited as “mischievous and obstructive”.

Foodstuffs has announced it will seek a High Court declaratory judgment on the legal test applicable to Progressive’s application for clearance shortly before the Commission’s criteria for assessment changed from the “dominance” threshold to the “substantial lessening of competition”.

“This is a mischievous and obstructive tactic by the dominant player in the food retail market,” said Mr Ted van Arkel, Managing Director of Progressive.

“The Commerce Commission has made the correct decision to hear our application under the proper criteria and Foodstuffs has prompted us to respond publicly to an issue which should be a matter for the Commission to determine without public or outside pressure.

“By its actions Foodstuffs is placing at risk all of the 11 applications lodged with the Commission before the May 28 law change.” he said. “It is our understanding that three of those have already been cleared. Foodstuffs is deliberately provoking commercial uncertainty for its own ends.”

Mr van Arkel said Foodstuffs is the dominant player in the food retail sector with 55 percent market share.

“A successful merger with Woolworths will allow our combined businesses to be more efficient with resulting cost savings being passed on to the consumer in lower food prices. The combined strength of the two businesses will introduce real competition and that is obviously what Foodstuffs fears.”

“Foodstuffs’ tactics are blatant and irresponsible and the Commission’s position will need to be upheld very quickly,” he said. “We just want to get on with our business.”


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