The Commerce Commission has cleared giant US food company Kraft Heinz to buy Cerebos Food & Instant Coffee and Asian Home Gourmet from Japan’s Suntory Beverage & Food, subject to the divestment of some sauce brands.
Last October, the Cerebos Gregg’s food and instant coffee factory in Dunedin was sold, as part of the wider $A290 million ($NZ319.1 million) acquisition of New Zealand, Australian and Asian assets by The Kraft Heinz Company.
In late April, Japanese corporate Suntory Group put up for sale its combined food and instant coffee divisions across Australia and New Zealand, but it retained the fresh coffee divisions.
There had been a relatively recent $20 million refurbishment of the Cerebos Gregg’s Dunedin plant. About 800 staff work in the combined New Zealand and Australian operations.
The Commerce Commission yesterday granted clearance for the New Zealand part of the global deal on the condition that Kraft’s local unit, Heinz Wattie, divest the licences for the Gregg’s brand for the New Zealand supply of red sauce (tomato sauce and ketchup), barbecue sauce and steak sauce, and the F. Whitlock & Sons brand for the supply of Worcestershire sauce in New Zealand.
The regulator said its ruling was based on competition issues in the national markets for the manufacture, importation and wholesale supply of a number of table sauces to supermarkets and the food service industry.
"We believe the merger of the number one and two wholesale suppliers to supermarkets of red sauce, barbecue sauce, steak sauce and Worcestershire sauce would be likely to result in a substantial lessening of competition in each of these markets," commission chairman Mark Berry said in a statement.
"However, we consider the divestment offered by Heinz Wattie’s is sufficient to remedy the competitive harm the merger would cause and we have given clearance to the merger subject to the divestment undertaking."
The commission is satisfied there are no competition concerns in the markets for Asian sauces, condiments, chilli sauce, gravies, powdered beverages, and soy sauce due to a range of factors, including low levels of overlap and the presence of competitive constraint from other suppliers.
