Commission clears Alliance to acquire Feltex yarn business
Published21 Jan 1997
The Commerce Commission has cleared Alliance Textiles NZ Ltd to acquire the Feltex yarn business and assets owned by BTR Operations NZ Ltd.
Alliance is not acquiring the Feltex carpet business also owned by BTR. This has been sold to another purchaser.
Commission Deputy Chairman Peter Allport said that Alliance acquiring the Feltex yarn plants in Wainuiomata (near Wellington) and Kakaraki (in Manawatu) would not result in it acquiring or strengthening a dominant position in any market.
The Commission concluded that the relevant markets are those for industrial yarns and hand knitting yarns.
It found that while Alliance would be the biggest producer, competition from six other producers and from imports would prevent it acquiring or strengthening dominance in either market.
If Alliance tried to use its market power, then the other New Zealand producers could respond by changing their production to meet customers' needs. There is no restriction on imports and no duty on Australian yarn. While there is a 13 percent duty on other imported yarns, they are still landed at competitive prices.
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any market. A company making an acquisition can apply for a clearance from the Commission, which will be granted if the Commission is satisfied that dominance is not acquired or strengthened.
Media contact:Communications Officer Vincent Cholewa
