The Commerce Commission has declined an application from National Foods Limited to acquire, through a wholly owned subsidiary, up to 100% of the issued shares of New Zealand Dairy Foods Limited (NZDF).

Commission Chair John Belgrave said the Commission could not be satisfied that the acquisition would not lead to a substantial lessening of competition within the yoghurt and dairy dessert market.

Public copies of the Commission's full decision will be released when available.

Background

NZDF is 50.004% owned by Fonterra Co-operative Group Limited. The Dairy Industry Restructuring Act 2001 requires Fonterra to unconditionally dispose of its shareholding in NZDF to a person who is not an 'associated person' of Fonterra, not later than 27 September 2002.

National Foods is a publicly listed company incorporated in Australia. It is one of Australia's largest food companies with core activities in milk and fresh dairy foods. National Foods wholly owns National Foods International Fine Foods (NFIFF), which manufacturers, distributes and markets yoghurts and dairy desserts in the New Zealand domestic market under the Yoplait brand name. NFIFF has one production facility in Palmerston North.

NZDF is a New Zealand unlisted company. It is majority owned by Fonterra, with approximately 6200 current and former Fonterra farmer shareholders holding the balance of the shares. NZDF manufactures, markets and distributes chilled dairy products in the New Zealand domestic and export markets. NZDF's brands include Fresh 'n Fruity, Swiss Maid, Country Goodness, Anchor, Chesdale and Ornelle.

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