Multinational cold storage and logistics firm Lineage has been given Commerce Commission clearance to acquire Cold Storage Nelson Limited (CSN).
Both Lineage and CSN are providers of cold storage services including frozen and chilled storage and ancillary services such as blast freezing.
In New Zealand, Lineage provides cold storage services in various locations including the Auckland, Waikato, Bay of Plenty, Hawke’s Bay, Canterbury and Otago regions.
The Commission’s investigation focused on the supply of cold storage services in the Waikato and Bay of Plenty regions (including Tauranga) where the merging parties most closely compete.
Chair Anna Rawlings says the Commission is satisfied the acquisition is unlikely to substantially lessen competition in any New Zealand market for the provision of cold storage services.
“CSN has cold storage facilities in Tauranga and Lineage is building a new cold storage facility at Tauriko, and so without the acquisition we think they would be significant competitors in Tauranga.
“The acquisition means that this competition will not develop and we considered whether this meant the level of overall competition, in particular in Tauranga, would be adversely affected,” Rawlings says.
“However, most users of cold storage facilities in Tauranga that we spoke to told us that they could switch to other providers in the Waikato/Bay of Plenty regions.
“Further, we are aware of new cold storage facilities being built near Hamilton, and the evidence suggests others may be interested in building new cold storage facilities if prices for cold storage services were to increase.
“Given this level of existing and potential competition, we are satisfied that the proposed acquisition is unlikely to substantially lessen competition,” she adds.
A public version of the written reasons for the decision will be available on the Commission’s case register.
