Both Moana and Sanford operate inshore fishing businesses that supply fresh fish caught using Annual Catch Entitlement (known as ACE), which is derived from fishing quota. Sanford is not selling any of its fishing quota; it will be leasing ACE related to its North Island inshore fishing business to Moana under a long-term arrangement. 

The proposed acquisition would result in Moana being allocated a large share of ACE for certain species. In its Statement of Issues, the Commission indicated it was considering whether Moana controlling this share of ACE could substantially lessen competition in any market, including if other commercial inshore fishing businesses need access to that ACE in order to harvest fresh fish for supply to wholesale and retail customers in New Zealand. 

Division Chair Dr Derek Johnston said the Commission was satisfied that the acquisition is unlikely to substantially lessen competition in any New Zealand market. 

“In making its assessment, the Commission compared the likely state of competition if the proposed acquisition proceeds with the likely state of competition if it does not. Whether the acquisition proceeds or not, Sanford is likely to close its processing facility in central Auckland, and sell its North Island inshore ACE.

The Commission also did not consider it likely that there would be any significant increase in third party processing capacity in the North Island within a timeframe relevant to the Commission’s consideration.

The Commission is satisfied that in any likely scenario without the proposed acquisition, the most likely purchaser of large volumes of ACE sold by Sanford would be Moana. As a result, the Commission considers that there would not be a substantial difference in the aggregation of ACE entitlements with and without the proposed acquisition”, Dr Johnston said.

“The Commission also considered that there was unlikely to be any substantial lessening of competition in any wholesale markets in relation to the supply of popular species of inshore fresh fish to New Zealand wholesale and retail customers.”

A public version of the written reasons for the decision will be available on the Commission’s case register in due course.

Background

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.

Further information explaining how the Commission assesses a merger application is available on our website.