Commission clears Kroma to acquire photo labs from Kodak
Published10 Mar 1999
The Commerce Commission today cleared Kroma Colour Prints Limited to acquire Zanda Laboratories Limited from Kodak New Zealand Limited.
Commissioner Dr Kate Brown said that the Commission was satisfied that, should the acquisition go ahead, Kroma would not acquire or strengthen a dominant position in the New Zealand market for photo processing and finishing for amateur photography.
Kroma's share of this market, after the proposed acquisition, was estimated to be at a level that would be well within the Commission's safe harbours (up to 40 percent market share or up to 60 percent if at least one competitor has 15 percent or more) and did not raise dominance concerns.
In addition, it would be constrained by considerable existing competition, in particular the large number of mini-labs, and barriers to entry by new competitors are low.
Three broad groups of businesses operate within this market.
Kroma, Zanda and Viko New Zealand Limited provide primarily a wholesale service. Customers take rolls of film to agents, most of whom are pharmacies. The films are sent to wholesale labs for processing and printing, photos are returned to the agents and then are collected by the customers.
There are also about 500 mini-labs, which deal directly with customers and process films on the premises.
The third group provide postal services. Customers post film to the labs and photographs are returned by mail.
Background
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any markets. Parties can apply for a clearance, which the Commission will grant if its is satisfied that dominance is not acquired or strengthened. A clearance, if granted, protects an acquisition from court action under the Act.
Public copies of the Commission's will soon be available on its website, www.comcom.govt.nz, and are available from reception at its Wellington office, level 7 Landcorp House 101 Lambton Quay.
