The commission has published a statement of preliminary issues relating to the application from Reward Supply Co Pty Ltd.
Reward supplies food service solutions in Australia and is a member of the ECF Group, an international distribution company group specialising in the supply of food service solutions.
ECF Group operates in New Zealand through Burns & Ferrall Ltd (trading as Reward NZ) and Safco Ltd.
Reward NZ and Southern Hospitality are both suppliers to the commercial food service industry in New Zealand.
Southern Hospitality was established in Dunedin by Hyam Hart and Roger Fewtrell in 1989.
It now has 12 locations throughout the country.
Having been involved in founding and growing the business since then, Mr Fewtrell — who owns 57.65% of Southern Hospitality through his company Hospo Ltd — had a strong desire to exit his shareholding to ensure a smooth transition for his next of kin, the application said.
Interests associated with Andy Rayneau were Southern Hospitality’s second-largest shareholder, holding 25.48% of the shares, and Mr Rayneau wanted to retire.
The acquisition was an opportunity for those two major shareholders and the remaining shareholders to exit their shareholdings, the application said.
In 2008, for the third time, Southern Hospitality was judged the country’s fastest-growing employer in the Deloitte Fast 50 index.
Reward NZ’s operations in New Zealand include importing or acquiring equipment (such as fridges, ovens and dishwashers), tabletop and kitchenware products, takeaway and packaging products, and other consumables for supply to food service customers; providing parts and servicing for food service equipment; and importing and wholesaling domestic sinks and tapware to merchants and other distributors in the domestic building products market.
It has showrooms in Auckland, Hamilton, Wellington and Christchurch and describes itself as ‘‘the largest supplier of non-food, food service products in our region’’.
The statement of preliminary issues outlines the key competition issues the commission considered important in deciding whether to grant clearance to the proposed acquisition.
It would give clearance if it was satisfied the acquisition was unlikely to have the effect of substantially lessening competition in a market.
Interested parties were invited to provide comments on the likely competitive effects of the proposed acquisition by May 16.
The commission was scheduled to make a decision on the application by June 2 but that date might be extended as the investigation progressed, it said.
