Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Commission grants clearance for sauce merger

The Commerce Commission has granted clearance for Heinz Wattie’s to acquire the food and instant coffee business of Cerebos Gregg’s subject to a divestment undertaking.

The divestment will include licences for the Gregg’s brand for the New Zealand supply of red sauce (tomato sauce and ketchup), barbeque sauce and steak sauce, and the F. Whitlock & Sons brand for the supply of Worcestershire sauce in New Zealand.

In November 2017, Heinz Wattie’s applied to the Commission and competition authorities in Australia and Singapore to acquire Cerebos Gregg’s as part of an international transaction.

In making its decision, the Commission primarily considered competition issues in the national markets for the manufacture, importation and wholesale supply of a number of table sauces to supermarkets and the food service industry.

“We believe the merger of the number one and two wholesale suppliers to supermarkets of red sauce, barbecue sauce, steak sauce and Worcestershire sauce would be likely to result in a substantial lessening of competition in each of these markets. However, we consider the divestment offered by Heinz Wattie’s is sufficient to remedy the competitive harm the merger would cause and we have given clearance to the merger subject to the divestment undertaking,” Commission Chair Dr Mark Berry said.

The Commission is satisfied there are no competition concerns in the markets for Asian sauces, condiments, chilli sauce, gravies, powered beverages, and soy sauce due to a range of factors, including low levels of overlap and the presence of competitive constraint from other suppliers.

A public version of the written reasons for the decision will be available on the Clearances Register in the near future.

Background

Heinz Wattie’s
The ultimate parent company of H.J Heinz Company (New Zealand) Limited (Heinz Wattie’s) is the Kraft Heinz Company, a public company listed on the NASDAQ whose core products are beverages, cheese, convenience foods, dairy foods, and snack foods. In New Zealand, Heinz Wattie’s manufactures and supplies jams, dressings, soups, sauces, beans, spaghetti, canned fruit and vegetables, frozen meals and vegetables, pates and dips. Relevant to the application for clearance is the range of sauces that Heinz Wattie’s supplies to supermarkets and the food service industry in New Zealand under the brands Wattie’s, Heinz, Lea & Perrins, HP, and Gourmet.

Cerebos Gregg’s
Cerebos Gregg’s Limited is ultimately owned by Suntory Beverage & Food Pte Ltd, a food and beverage company operating throughout Australasia. In New Zealand, Cerebos Gregg’s supplies sauces under a number of brands including Gregg’s and F. Whitlock & Sons. Cerebos Gregg’s produces the sauces at its manufacturing plant in Australia.

Merger clearance process
When considering a proposed merger, the Commission must determine whether any competition that would be lost with the merger would be substantial. Where a merger is likely to substantially lessen competition in a market, the acquiring company may undertake to divest certain assets. If we consider the proposed divestment undertaking will remedy the likely substantial lessening of competition, we will clear the merger. For a divestment undertaking to remedy competition concerns, we must be satisfied that the divestment will result in sufficient additional competitive constraint on the merged firm so that a substantial lessening of competition is no longer likely. A fact sheet explaining how the Commission assesses a merger application is available on the clearances page.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Land Report: Issues With Soil Degradation

An environmental report released today has found we are damaging and losing our soils and our native plants and animals. More>>

ALSO:

Water Quality Report: Cause For Optimism

National River Water Quality Trends released by Land, Air, Water Aotearoa (LAWA) this week, reveal that for all river water quality parameters monitored over a 10 year period, more sites were improving than deteriorating. More>>

ALSO:

IMF Report On NZ: Positive Economic Outlook

Minister of Finance Grant Robertson has welcomed the IMF’s Concluding Statement, released following its annual visit, which provides an independent assessment of the strength of the New Zealand economy. More>>

ALSO:

Retail Power Price: Review Panel Named

The Energy and Resources Minister Megan Woods has released the details of who will sit on an expert advisory panel which is tasked with leading a review into the price of electricity in New Zealand. More>>

ALSO:


Increasingly Disruptive Threats: Govt Cyber Security Refresh

Broadcasting, Communications and Digital Media Minister Clare Curran today announced a comprehensive refresh of New Zealand’s approach to cyber security. More>>

ALSO:


Regional Growth: Action Plan To Modernise Taranaki’s Economy

The Provincial Growth Fund (PGF) will invest up to $20 million to help future-proof the Taranaki region by diversifying its economy, creating additional jobs and leveraging off the strong base the region has established through its oil, gas and agricultural ... More>>

ALSO:

Winding Down Irrigation: Funding Ends For Crown Irrigation Investment

The Government has begun winding down public funding for large-scale irrigation through Crown Irrigation Investments Limited (CIIL), in line with the Coalition Agreement and the Confidence & Supply Agreement. More>>

ALSO: