The Commerce Commission has declined an application from Tennex Capital Limited, owners of International Waste (IWL), to acquire the medical and quarantine waste business of San-i-pak Limited (San-i-pak).

The Commission is not satisfied that the merger of IWL and San-i-pak would not have the likely effect of substantially lessening competition in the supply of treatment and disposal of medical and quarantine waste services in the South Island.

Commission Chairman Dr Mark Berry said IWL and San-i-pak are the only parties in the South Island currently providing the treatment and disposal of medical and quarantine waste services and that the merger would reduce the market to a monopoly.

“While Tennex submitted that without the merger San-i-pak would exit the market anyway, we were unable to exclude the real chance that San-i-pak would continue to operate, whether under its current owners or under the ownership of a third-party after a sale,” Dr Berry said.

“We also aren’t convinced that other suppliers would enter the market and replace the competition lost between IWL and San-i-pak.”

“In our view, we could not exclude the real chance that as a result of this merger the prices paid for the treatment and disposal of medical and quarantine waste services would increase.”

A public version of the written reasons for the decision will be available shortly on the Clearances Register.

Background

Through its subsidiary, International Waste (IWL), Tennex provides medical and quarantine waste collection, treatment and disposal services. IWL also provide services in respect of the disposal and recycling of other products such as fluorescent tubes. It operates facilities for the treatment of medical and quarantine waste in Auckland, Wellington, Christchurch and Dunedin. IWL (directly itself and with the assistance of sub-contractors and third-parties) collects medical and quarantine waste on a national basis for processing at its treatment facilities.

San-i-pak provides medical and quarantine waste collection, treatment and disposal services, as well as general waste services. San-i-pak operates a single facility for the treatment of medical and quarantine waste in Christchurch. San-i-pak collects medical and quarantine waste primarily in the greater Canterbury region.