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CC Wins Foodstuffs Case

Issued 27 June 2001/75

High Court upholds Commission's approach to amended Commerce Act

The Auckland High Court today released a decision that the Commerce Commission should apply the dominance test to applications for clearance of business acquisitions received before May 26.

Commission Chair John Belgrave said that the Commission is very pleased that the Court has upheld the Commission's approach.

"The Commission will now issue its decisions on the seven outstanding clearance applications as soon as it can," Mr Belgrave said.

Mr Belgrave said that the applications that the Commission has on hand and the dates at which it expects to make decisions are:

* Solid Energy New Zealand Limited / Todd Coal Limited, June 28
* Lowe Corporation Limited / Colyer Mair Limited, June 28
* Computershare Registry Services Limited / BT Portfolio Services (NZ)
Limited, June 28
* Caltex New Zealand Limited / Challenge Petroleum Limited, June 28
* Carter Holt Harvey Limited / Central North Island Forest
Partnership, June 29
* Howard Smith Limited / OPSM Protector Limited, June 29
* Progressive Enterprises Limited / Woolworths (NZ) Limited, July 6

Before recent amendments, the Commerce 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 Commission took the view that applications on hand at May 26 should be investigated under the law as it was when the applications were made.

Foodstuffs (Auckland) Limited took court action seeking a judgment that the Commission should apply the new SLC test.

Today the Court upheld the Commission's view and ruled that the dominance test should be applied.

Mr Belgrave said that it is important to note that the Court's decision applies to only those applications on hand at May 26. Applications made on or after May 26 will be investigated under the SLC test.


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