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 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.