Neil Anderson: lawyer says it's 'unlikely' that Foodstuffs' Commerce Commission appeal will succeed

A competition lawyer says it'll be very unlikely Foodstuff's appeal will succeed.

The Commerce Commission declined its merger of its North and South Island arms- saying it would lessen grocery competition and hurt suppliers. 

Foodstuffs North Islands chief executive, Chris Quin, says the change would actually make it easier for suppliers. 

Lawyer Neil Anderson says it's unlikely a case like this will go to court, with even less chance of winning.

"The commercial parties, by the time they've been through a clearance process and then are faced with an appeal process - they'll push it out a further six months, it's quite unusual for a deal to survive that."

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Episode Transcript

Speaker 1 (00:00):
Heather Do for cl So food Stuffs has announced it
will appeal the COMMUS Commission's decision not to allow its
merger of its North and South Island operations. Food Stuff's
North Island CEO Chris quinn I was talking to Kerry
wood In this morning and said he doesn't believe a
merger will substantially lessen competition, just like the COMMOS Commission
thinks it will.

Speaker 2 (00:17):
These are two regional cooperatives. We don't compete with each
other in any way in a retail market, and we
don't compete.

Speaker 1 (00:23):
To buy groceries of suppliers.

Speaker 2 (00:25):
Now.

Speaker 1 (00:25):
Neil Anderson is a competition lawyer at amb Competition Lawyers
and with US.

Speaker 2 (00:29):
Now hey Neil, Hello Heather.

Speaker 1 (00:32):
It's rare, isn't it for a court to overturn a
COMMOS Commission decision like this one, isn't it?

Speaker 2 (00:38):
It is rare, But it's actually rare for it to
come in front of a court in the first place. Really,
not a whole lot of declines by the Commas Commission
are appealed for practical reasons more than anything else.

Speaker 1 (00:51):
Why do courts so rarely overturn them?

Speaker 2 (00:55):
Well, I think it's partly what I just said, which
is there are very few instances of appeals actually taken.
I think it's primarily that. So you know, the commercial parties,
by the time they've been through a clearance process, you know,
and then are faced with an appeal process which may
push them out of fairther six months. It's quite unusual
for a deal to be able to survive that. Normally,

(01:16):
if you get declined, that's the commercial parties walk away.
So most declines of the Commons Commission aren't actually tested
in the courts at all.

Speaker 1 (01:24):
So that would suggest that that that Food Stuffs believes
it has a strong case right because this is going
to cost them a lot of money and a lot
of time taking this to court, isn't it.

Speaker 2 (01:34):
Yeah, it might be, but it may also just reflect
that they're not on a burning platform with their transactions.
So it's probably one that can be done at any time,
and you know they can wait. You know, there's not
another buyer and the wings or you know that this
is their only deal they have in front of them,
and you know, they probably have the time to work
through to a conclusion for a deal that they obviously

(01:56):
think is valuable. So they're probably in a rare position
commit to actually pursue their legal rights.

Speaker 1 (02:03):
Yeah, Neil, thank you very much, really appreciate your time.
It's Neil Anderson, competition Lawyer at AMB Competition Lawyers. For
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