THE purchase of Ōtorohanga business Supa Shavings is being investigated by the Commerce Commission. PHOTO: BRIANNA STEWART
THE Commerce Commission has launched an investigation into the purchase of Ōtorohanga business Supa Shavings over a potential breach of market competition laws.
Supa Shavings was bought in May last year by Alderson Logistics Limited, the same company which earlier purchased another company operating in the same market.
The Commerce Commission described Supa Shavings and ABS Carriers Limited, trading as Animal Bedding Supplies/Moorey Animal Bedding, as the largest suppliers of wood shavings-based animal bedding products in the Waikato and Bay of Plenty regions.
An announcement by the commission about the investigation invited anyone who believed they held relevant information about the merger to get in contact by emailing registrar@comcom.govt.nz with “Alderson/Mooreys/Supa Shavings” in the subject line.
Contact must be made prior to 4pm next Thursday, February 9.
Business acquisitions that have or are likely to substantially lessen competition in a market are prohibited under the Commerce Act.
Approval of the Commerce Commission should be sought by businesses that think a proposed merger with a competitor might substantially lessen competition, according to the government agency’s website.
The commission said the parties involved did not seek clearance for either acquisition.
When asked by King Country News who is responsible for applying for clearance in the circumstance of a business acquisition, the commission pointed to section 66 of the Commerce Act 1986.
The law states a person who proposes to acquire assets of a business or shares is able to seek clearance for that acquisition from the commission, making it the responsibility of the purchaser to formally file the clearance application.
The commission confirmed to King Country News the acquisition was first brought to its attention by a complaint from a third party, though that party’s identity was not disclosed.
It is unknown how long the investigation will take, with others of a similar nature varying based on factors including the complexity of the case, the level of cooperation of parties under investigation as well as third parties, and the nature of the information gathered during the investigation.
Individuals found to have broken the law under section 47 of the Commerce Act face a penalty of up to $500,000.
For firms, the penalty could be up to $10 million, three times the value of any commercial gain resulting from the law break, or 10% of the firm’s turnover if commercial gain could not be established – whatever is greater.
