The Commerce Commission has released the public copy of its decision to decline Progressive Enterprises Limited from acquiring Woolworths (New Zealand) Limited.

The Commission declined Progressive's application to acquire Woolworths on December 13.

Commerce Commission Acting Chair Paula Rebstock said the Commission could not be satisfied that the acquisition would not lead to a substantial lessening of competition.

"The Commission defined the principal relevant market as being that for the retailing of grocery items in supermarkets in multiple local markets spread throughout New Zealand," said Ms Rebstock.

"In these markets the proposed acquisition would result in the number of firms shrinking from three to two, and market concentration rising accordingly.

"The Commission also found that the barriers to entry into these markets are high, so that the two incumbents would not face competition from potential new entrants.

"In these circumstances, and given other characteristics of the markets, the Commission was concerned that the acquisition would materially enhance the potential for coordinated market power."

Ms Rebstock added that the Commission found that competition would not be substantially lessened in the national market for the wholesale supply of groceries.

Media contact: Director of Business Competition Branch Geoff Thorn

Phone work (04) 498 0958, cellphone 021 661 104

Communications Manager Jackie Maitland

Phone work (04) 498 0920, cellphone (025) 249 3407