The Commerce Commission has today cleared J Wattie Foods Ltd to acquire four business units operated by Kraft General Foods New Zealand Ltd.

These are those producing jam and marmalade, canned beans, salad dressings mayonnaise and sauces and portion control foods. Portion control foods are small single serve packs.

Commission Deputy Chairman Peter Allport said that the Commission had concluded that dominance concerns did not arise in any of the relevant markets.

While J Wattie Foods would move from being a relatively small jam producer to being a large one, there are several other suppliers. There is also potential competition from new entrants and from increased imports.

Mr Allport said that J Wattie Foods has a very high market share for canned baked beans and spaghetti, and the acquisition will increase this to a small extent. However, there is ease of entry into production in New Zealand, and there is the possibility of increased imports, under the manufacturers' brands or as housebrands. There are also substitute products for hot convenience meals.

The Commission did not consider that dominance in the market for canned baked beans and spaghetti would be acquired or strengthened by the acquisition.

For salad dressings, mayonnaise and sauces, Kraft and Wattie have a relatively small share of the market. The exception is tomato sauce where, although Wattie has a substantial market share, Kraft has less than 1% of the market.

As Wattie does not produce portion control foods, the acquisition does not change the number of suppliers of these lines.

Media contact:Communications Officer, Vincent Cholewa

Phone work (04) 498 0920, home (04) 479 1432