The Commerce Commission has granted clearance for Life Health Foods NZ Limited to acquire the business and assets of Chalmers Organics Limited
Life Health Foods and Chalmers Organics both supply a range of vegetarian and plant-based products, including tofu and meat alternative products, to supermarkets and other retail stores, as well as to the food service industry.
In reaching its decision, the Commission considered the potential impact of the proposed acquisition on competition in national markets for the wholesale supply of tofu and, separately, meat-alternative products to the major grocery retailers and other customers.
Chair Anna Rawlings said the Commission was satisfied that the acquisition is unlikely to substantially lessen competition in any New Zealand market.
“The Commission found that there are several smaller manufacturers of tofu who currently supply the major grocery retailers and other speciality retailers, and if encouraged, could increase their supply of tofu to these retailers.
“Further, most tofu is sold through the major grocery retailers. Foodstuffs and Woolworths hold significant buyer power and are able to prevent unjustified price increases from the merged entity through their ability to source tofu from competing suppliers.”
In the market for the supply of meat-alternative products, the Commission considered that the presence of other suppliers would constrain the merged entity.
“Our investigation identified a number of recent entrants, particularly from overseas, in the supply of meat-alternative products which will constrain the merged entity,” continued Rawlings.
A public version of the written reasons for the decision will be available on the Commission’s case register in due course.