George Weston Foods has been given the green light for its proposed acquisition of wheat milling and storage assets used by Farmers Mill Ltd.
The Commerce Commission has granted clearance for George Weston Foods (NZ) Limited, trading as Mauri New Zealand, to acquire the wheat milling and storage assets used by Farmers Mill Limited to carry on its business.
The Commission’s assessment of the proposed acquisition focused on the supply of bulk and bagged flour. Central to the Commission’s decision was the level of competition that Farmers Mill would likely provide if the proposed acquisition did not proceed.
Chair Dr John Small said the Commission was satisfied that the acquisition is unlikely to substantially lessen competition in any New Zealand market.
“After careful consideration of all of the relevant factors, the Commission is satisfied that the proposed acquisition is unlikely to substantially lessen competition when compared to the situation if the proposed acquisition does not proceed,” said Dr Small.
The mill was first opened in 2013 as the only independent grower-owned and operated flour producer in New Zealand. It has supplied bulk and bagged flour to industrial food manufacturers, bakeries and some retailers.
The Commerce Commission had previously stated that it could only give clearance to a proposed merger if it was satisfied it was unlikely to have the effect of substantially lessening competition in a market.
Mauri operates flour mills across the country, with locations in Auckland, Wellington and Christchurch. Its clients have largely consisted of industrial food manufacturers, and bagged flour has been supplied to wholesalers, bakeries and supermarkets.
Farmers Mill operates a flour mill in Timaru and, like Mauri, also supplies bulk and bagged flour to industrial food manufacturers, bakeries, and some retailers. The owners of Farmers Mill are wheat growers and the majority of the wheat that it currently mills comes from its owners. For the same reasons as Mauri, Farmers Mill also supplies broll.
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