The Commerce Commission has granted clearance for Sonoco New Zealand Limited to acquire the business assets of T.T.L. Pacific Limited.

Commerce Commission Chair Dr Mark Berry said the Commission was satisfied that the proposed acquisition will not have, or would not be likely to have, the effect of substantially lessening competition in any of the relevant markets.

Both Sonoco and T.T.L. Pacific manufacture cylindrical cardboard cores and tubes. The Commission found that these cores and tubes fall into two categories. The first are standard specification cores and tubes used in products such as cling film, tapes, carpets, mailing tubes and concrete forming tubes. Secondly, there are high specification cardboard cores which are used in New Zealand's paper mills as the centre piece of the large rolls of paper produced. These customers specify very fine dimensional and moisture content tolerances and demand very flexible delivery arrangements. Dr Berry said it was these requirements that led the Commission to find the following relevant markets:

  • the North Island market for the manufacture and wholesale supply of standard cardboard cores and tubes (the standard specification core market); and
  • separate Bay of Plenty and Auckland markets for the manufacture and wholesale supply of high specification cardboard cores (the high specification core markets).

The Commission considers that the merged entity would be constrained in the standard specification core market by the presence of a number of other suppliers. In respect of high specification cores, the two merging parties have not competed with one another in the past, and the Commission considers that the loss of a potential supplier in these separate regional markets is unlikely to substantially lessen competition.

 

A public version of the written reasons for the decision will be available as soon as practicable on the Commission's website at Hwww.comcom.govt.nz/clearances-register