The Commerce Commission has some issues with the proposed purchase of the SealesWinslow feed company by Farmlands Co-operative Society, from Ballance Agri-Nutrients.
“We are not yet satisfied that the proposed acquisition would not be likely to substantially lessen competition,” as the commission summarised its issues by way of a double negative.
Although it still has work to do on regional boundaries of markets, the commission has concerns about the merged entity having unilateral ability to profitably raise prices and/or reduce service or quality.
“We are not yet satisfied that the proposed acquisition would not give rise to vertical effects, given that Farmlands is both a manufacturer and retailer of pelletised compound feed.”
The deadline for making a decision on the application by Farmlands has been extended to March 22.
Submissions and supporting evidence are to be provided by the parties by February 21.
Farmlands and Seales Winslow are two of the major manufacturers of pelletised feed for livestock, mostly dairy cows and calves.
Farmlands got into that business by acquiring NRM in 2013.