The Commerce Commission has cleared Tip Top Ice Cream Company Limited to acquire the "New American" take home ice cream business of United Dairy Foods Limited after the High Court referred a previous application on appeal back to the Commission for new information to be considered.

Commission Chairman Peter Allport said that in light of this year's sales figures, the Commission is now satisfied that the acquisition would not result in Tip Top acquiring or strengthening a dominant position in the nation-wide market for take home ice cream packs.

The Commission had previously declined to clear the acquisition. Mr Allport said that the market has changed considerably since the Commission looked at the proposal last year, with "New American" having lost market share to Talley's and Kiwi brands.

The Commission is satisfied that the combined entity's market share is now within the safe harbours published in the Commission's Business Acquisitions Guidelines. The safe harbours are market share of up to 40 percent, or up to 60 percent if at least one competitor has a market share of in the order of 15 percent or more.

In 1996 the Commission declined to clear Tip Top's acquisition of all the "New American" ice cream and dessert businesses because of dominance concerns in the take home ice cream market.

A subsequent application by Tip Top to acquire all of New American's ice cream and dessert businesses, except for the take home business, was cleared later that year.

Last year Tip Top applied for clearance to acquire the "New American" take home business, and the Commission declined the clearance.

This year United appealed the Commission's most recent decision to the High Court.

Sales information for the first half of this year showed that the market had changed considerably since 1997. Last week the Commission and United made a joint submission to the Court asking that instead of the Court hearing the appeal, it refer the matter back to the Commission for reconsideration. The Court did so, and, based on an examination of current market shares, the Commission cleared the proposal.

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 will be granted if the Commission is satisfied that dominance is not acquired or strengthened. A clearance, if granted, protects an acquisition from legal challenge under the Act.

Media contact: Commerce Act Manager Jo Bransgrove

Phone work (04) 498 0958

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commission media releases can be viewed on its web site www.comcom.govt.nz