The Commerce Commission has granted clearance to Heyden Farms Limited, Henergy Cage-Free Limited and Rasmusens Poultry Farms Limited to merge their respective egg production operations.
In reaching its decision, the Commission considered the potential impact of the proposed merger on competition in the North Island markets for the production and wholesale supply of cage and colony eggs, barn laid eggs and free range eggs.
Chair Anna Rawlings said the egg industry is undergoing a substantial degree of change with the regulatory ban on caged egg production beyond 2022, supermarkets phasing out colony eggs from 2025 and a significant increase in the demand for free range eggs. However, despite this change, the Commission is satisfied that the merger is unlikely to substantially lessen competition in any New Zealand market.
“Our investigation found a significant number of competing egg producers in each of the relevant markets, including some that are expanding their operations, particularly in the production of barn laid and free range eggs. These competitors are likely to constrain the ability of the merged entity to raise prices, reduce service quality, or coordinate their behaviour,” Rawlings said.
A public version of the clearance application will be available shortly on the Commission’s case register.
All three parties are producers and suppliers of eggs. Heyden Farms supplies cage eggs, barn laid eggs, and free range eggs from its production facilities in the Waikato and the Bay of Plenty. Henergy Cage-Free supplies barn laid eggs from its production facilities near Masterton. Rasmusens Poultry Farms supplies cage eggs and free range eggs from its production facilities near Whanganui.
"We will give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market."