The Commerce Commission today declined to clear Waste Management NZ Limited to acquire Waste Care Limited.

Commission Acting Chairman Mark Berry said the Commission was not satisfied that Waste Management would not acquire or strengthen a dominant position in the Auckland regional market for disposal of solid, non-hazardous waste. This is, in effect, the regional market for landfills.

The proposal would result in Waste Management owning two of the four landfills in the region, Redvale and Whitford. However, the two competing landfills, Rosedale and Greenmount, will be full and closed by 2003. Meanwhile Redvale could remain open for another 25 years and Whitford for another 17.

If there was no new entry Waste Management would have a monopoly in this market within four years.

The Commission found that barriers to entering the market are high because of the scarcity of suitable sites, Resource Management Act constraints and the high costs of developing a landfill. It concluded that new entry to this market would be neither likely nor sufficiently timely to constrain a combined Waste Management/Waste Care.

It also concluded that alternatives to landfills, such as recycling and incinerators, are unlikely to constrain Waste Management if the proposed acquisition were to go ahead.

The Commission investigated the effect of the proposal on the nine other relevant markets. It concluded that in those markets it would be satisfied that dominance would not be acquired or strengthened by any parties.

Those nine markets are:

? seven regional markets around the country for the collection and delivery of solid non-hazardous waste, excluding excavated earth;

? the Auckland market for waste transfer stations for solid, non-hazardous waste; and

? the market for hiring portable toilets in the Hawkes Bay region.

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 it is satisfied that dominance is not acquired or strengthened.

Waste Management can appeal the Commission's decision to the High Court. It can also apply for an authorisation. A business acquisition, which is prohibited because of dominance concerns, can still be authorised if the Commission is satisfied that its public benefits outweigh the detriments from loss of competition.

Media contact: Commerce Act Manager Geoff Thorn

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