ComCom clears Kraft Heinz to buy NZ Cerebos units, conditional on sauce divestments
By Tina Morrison
March 9 (BusinessDesk) - The Commerce Commission has cleared US food company Kraft Heinz to buy Cerebos Food & Instant Coffee and Asian Home Gourmet from Japan's Suntory Beverage & Food, subject to the divestment of some sauce brands.
Japan's Suntory put the units on the block in April last year and announced it had reached a deal with Kraft Heinz in October. The Commerce Commission today granted clearance for the New Zealand part of the global deal on the condition that Kraft's local unit Heinz Wattie divest the 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.
The regulator said its ruling was based on 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," Commission chair Mark Berry said in a statement. "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.”
The commission is satisfied there are no competition concerns in the markets for Asian sauces, condiments, chilli sauce, gravies, powdered beverages, and soy sauce due to a range of factors, including low levels of overlap and the presence of competitive constraint from other suppliers.