New Zealand competition authority conditionally approves Cerebos Gregg’s acquisition

The New Zealand Commerce Commission has approved Heinz Wattie’s acquisition of food and instant coffee company Cerebos Gregg’s, subject to a divestment undertaking.

The commission noted that the divestment will include licences for a number of sauces sold under the Gregg’s and F Whitlock & Sons brands.

Last November, Heinz Wattie’s submitted an application to the competition authorities in Australia and Singapore to acquiring Suntory’s Cerebos Gregg’s business.

Commerce Commission chair Dr Mark Berry said: “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.

“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.”

While granting the conditional approval, the commission focused on the competition issues in the national markets for the manufacture, importation and wholesale supply of a wide range of table sauces to the retail and the foodservice industry.

The approval was granted after the commission was convinced that there would be no competition concerns for Asian sauces, condiments, chilli sauce, powdered beverages and soy sauce.

The authorities believed that the factors such as low levels of overlap and the presence of competitive constraint from other suppliers will help in maintaining the competition in the country.

Last October, Suntory signed an agreement with the Kraft Heinz Company to sell its Cerebos food and instant coffee business in Australia and New Zealand, as well as its Asian Home Gourmet Singapore business, for a total consideration A$290m.

Suntory did not include the Cerebos Fresh Coffee businesses located in Australia and New Zealand in the sale agreement, as it intends to combine it with the new business unit, which focuses on capturing a larger share of the rapidly growing global fresh coffee market.