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Commission Seeks To Appeal Warehouse Decision

Commerce Commission Seeks To Appeal Warehouse Decision

The Commerce Commission is seeking leave to appeal the High Court's decision which cleared the way for the three Foodstuffs co-operatives or Woolworths Ltd to acquire up to 100% shares in, or assets of, The Warehouse Group Ltd.

Last month the High Court, on appeal by Foodstuffs and Woolworths, overturned the Commission's decision to decline clearance for either potential acquisition.

Commission Chair Paula Rebstock said, "Appealing the judgment is important given the precedent it sets for the application of competition law in New Zealand, and the implications this has for the long term interests of supermarket consumers."

The appeal will raise questions of law, including the application of competition law to mergers and acquisitions, and the impact of the proposed acquisitions on competition in the large supermarket markets.

The Commission remains concerned about competition in the supermarket sector where a duopoly exists, in effect, except in the three regions where the Warehouse has opened an Extra supercentre.

The Commission is seeking to have the matter dealt with urgently. It is today filing an application for leave to appeal the High Court judgment, and is also seeking a stay of execution of the judgment pending the determination of any appeals.

There will be no further comment at this stage.

Background

The Commission declined clearance for either the three Foodstuffs co-operatives or Woolworths Ltd to acquire up to 100% shares in, or assets of, The Warehouse Group Ltd because New Zealand's supermarket retail market is already highly concentrated. There are high barriers to entry in the industry, and the Commission considers that the Warehouse is uniquely placed to compete with the supermarkets because of its existing property portfolio, extensive distribution networks and established brand.

Commission media releases can be viewed at www.comcom.govt.nz

ENDS

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