Commerce Commission concerned Foodstuffs merger plan will reduce competition in grocery sector

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Photo: 123rf / Sergii Sverdelov

The Commerce Commission is concerned a proposed merger between Foodstuffs North Island and Foodstuffs South Island will reduce competition in the grocery market.

The commission said the merger would see Foodstuffs become a single national grocery entity – further reducing competition in the market.

It was concerned there was also potential for a merged Foodstuffs to coordinate with the other large national grocer, Woolworths, to get lower prices and more favourable trade terms from suppliers.

It said there was potential for the merger to slow the pace of product innovation and ultimately reduce the range and quality of grocery products.

“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,” the commission said.

It was inviting feedback on the issues by 18 April.

A decision on the merger was due to be made by the commission by 31 May.

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