Merger of Rio Beverages and some Cerebos Gregg's assets cleared
Published30 Jan 1997
The Commerce Commission today cleared a business acquisition that would in effect merge all the assets of Rio Beverages Ltd and the assets of the fruit juice business of Cerebos Gregg's Ltd into a new company, New Juice Ltd.
Rio and Cerebos Gregg's recently formed New Juice and are its joint shareholders.
Commission Member Joe Auton said the Commission was satisfied that the proposal would not result in New Juice acquiring or strengthening a dominant position in any market.
The Commission examined the likely competitive impact of the proposal on the manufacture, importation and wholesale distribution of fruit juice products.
It found that Rio and Cerebos Gregg's have respectively the second and third largest market shares, but should the proposal go ahead, Frucor Holdings Ltd and its subsidiaries would still have a larger market share than New Juice.
A large number of smaller companies also operate in the market and importation of pre-packaged juice and juice concentrate is not difficult. While large scale entry to the market is likely to be costly, small scale entry or contracting by existing firms to produce new brands is not.
Supermarkets have considerable buying power, and if necessary they can readily switch to a different juice supplier. In addition, some supermarkets have developed their own house brands.
Media contact:Chief Investigator Business Acquisitions John Preston
