The Commerce Commission has agreed to an extension of time to consider the Foodstuffs merger application with the parties. A decision from the Commission, whether to clear the application or issue a Statement of Unresolved Issues, is now due on 21 June 2024.
Preserving the competitiveness of markets in New Zealand is an enduring priority for the Commission, and it will continue to carefully scrutinise the implications of the proposed merger of Foodstuffs North Island and Foodstuffs South Island for suppliers and consumers.
In considering merger applications, the Commission was able to seek an extension to its decision date when it requires additional time to reach a decision.
First announced in November 2023, the Foodstuffs Merger has incurred more than one setback. The Commission was originally scheduled to make a decision by 4 April 2024; however, Foodstuffs North Island and Foodstuffs South Island have agreed to an extension of time. The second decision date was scheduled for 31 May 2024.
A statement of issues outlined the commission's potential competition issues of the proposed merger following its initial investigation. The statement of issues invited submissions from both Foodstuffs North Island and Food Stuffs South Island, as well as other interested parties.
Foodstuffs North Island and Foodstuffs South Island currently operate as separate co-operatives that focus on serving the island in which they are located. With the proposed merger, Foodstuffs North Island and Foodstuffs South Island would merge to become a single national grocery entity.
In March 2024, Stats NZ found the Foodstuffs co-ops had recorded a further slowdown in the rate of food price increases in stores. Foodstuffs’ data on the same categories as the FPI basket show the co-ops recorded a 2.4 percent pa average increase in prices throughout its more than 500 stores, compared to a year ago – again, the lowest rate since they started comparing prices with the FPI, in May 2022, 22 months ago.
The Commerce Commission will give clearance to a proposed merger if it is satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.
To read more about the Foodstuffs Merger, click here.
