New Zealand regulator Commerce Commission has issued a statement of preliminary issues regarding the proposed merger of Foodstuffs North Island and Foodstuffs South Island.  

The two entities, which currently operate as separate co-operatives, applied for clearance to merge last month.  

The commission’s statement outlines the key competition concerns that will influence its decision on whether to grant the merger clearance. 

Interested parties are invited to submit their comments on the potential competitive effects of the merger.  

The commission aims to reach a decision by 5 March 2024, although this date may change depending on the investigation’s progress. 

The commission in a statement said: : “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.”  

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By GlobalData

Currently, the two co-operatives have a significant presence in New Zealand’s retail sector, with each operating under the New World, PAK’nSAVE, and Four Square brands. 

In addition, Foodstuffs North Island also offers wholesale services under Gilmours and Fresh Connection, while Foodstuffs South Island also has retail operations under the On the Spot and Raeward Fresh banners, as well as wholesale operations under the Trents banner and through some Raeward Fresh stores. 

Despite operating independently, the two co-operatives have a history of collaboration, providing mutual support and sharing ownership of several entities.  

These include Foodstuffs (NZ) Limited, which represents the co-operatives on national issues, and Foodstuffs Own Brands Limited, which negotiates with suppliers for private label products.