The Commerce Commission has published a statement of preliminary issues relating to an application seeking clearance received from Frucor Beverages Ltd (Frucor). The application, received on 7 July 2009, sought clearance for Frucor Beverages to acquire up to 100 per cent of the assets or business of Simply Squeezed Holdings Ltd (Simply Squeezed).

The statement of preliminary issues is now a part of the Commission's clearance process after consultation with the business community in 2008. The Commission's statement of preliminary issues and the public version of the application can be accessed via the Commission's website www.comcom.govt.nz under the Clearances Register. The statement of preliminary issues outlines the key competition issues the Commission currently considers will be important in deciding whether or not to grant clearance.

In summary, the key issues the Commission will consider at this stage of the investigation are:

  • market definition - whether a category based product market definition is appropriate and whether separate customer markets could be defined;
  • existing competition - the strength of existing competition and the ability of existing competitors to expand;
  • potential competition - the requirements for new entry;
  • countervailing power - the level of countervailing power held by different customer types; and
  • conglomerate effects - whether the proposed acquisition will enhance or create the ability of the combined entity to exercise market power.

The Commission also invites submissions from interested parties who consider that they have information relevant to the Commission's consideration of this matter. Submissions can be sent to registrar@comcom.govt.nz with the reference Frucor/Simply Squeezed in the subject line of your email or to

PO Box 2351, Wellington

6140 by 5pm on Wednesday 5 August 2009.

 

No further comment will be made by the Commission until the outcome of the clearance application is announced.

Background

Mergers and Acquisitions Clearance Process Guidelines were issued by the Commerce Commission in November 2008. These guidelines introduced a new stage in the Commission's process, which is to make public a statement of preliminary issue for clearance application received.

The guidelines can be downloaded from the Commission's website www.comcom.govt.nz under Clearances.

Statement of preliminary issues outlines the key competition issues the Commission currently considers will be important in deciding whether or not to grant clearance. The issues highlighted in a statement are based on the information available at the time of publication and may change as the Commission's assessment of the application for clearance progresses. Therefore, the issues highlighted in a statement of preliminary issues are no way binding on the Commission.

The statement of preliminary issues provides an opportunity for all interested parties to consider the issues identified by the Commission and is intended to facilitate the submission of further information by the merger parties and other interested parties that might assist the Commission's assessment of the application.