Supermarket wars not over yet as loser mulls a further attack

Friday 29th June 2001

DOMINANCE RULES: Foodstuffs is still thinking about upsetting Progressive's apple cart after losing its appeal

By Nick Smith

Supermarket operator Foodstuffs is considering appealing a High Court decision handing victory to rival Progressive Enterprises.

Progressive Enterprises will find out next Friday whether it can buy the Woolworths New Zealand chain after the court upheld the Commerce Commission's right to handle its application under the old, looser rules.

But Foodstuffs managing director designate Tony Carter said yesterday the company was seeking legal advice and "any decision on whether to appeal the judgment will be made promptly."

Foodstuffs owns the Pak 'N Save and New World chains and holds about 55% of the market.

Woolworths' owner, Hong Kong-based Dairy Farms, has yet to declare its local arm for sale but it has been withdrawing from overseas operations elsewhere, including Australia.

The decision by High Court judges Hugh Williams and Barry Paterson that the commission acted correctly freed up a log jam of applications, three of which were released yesterday.

Computer Registry Services got the commission green light to buy BT Portfolio Services, while at press time decisions were still pending on Caltex's acquisition of Challenge Petroleum and on Howard Smith's bid for OPSM Protector.

Decisions are due today on Carter Holt Harvey's application to acquire the Central North Island Forest Partnership and Solid Energy's bid to buy Todd Coal. The commission will rule on Lowe Corporation's takeover of Colyer Mair next week.

The court case centred on whether the commission was correct to use the old definition under the Commerce Act to determine applications.

The amended provisions came into force one day after Progressive's application.

The judges delivered a serve to the government, saying "it would have been helpful had Parliament" addressed the issue of transition from the old to the new law in framing the amendment.

In the three months leading up to the May 26 deadline, when the amendment came into force, the commission received 14 clearance applications for acquisition - more than half its normal annual total.

By the time Foodstuffs filed its legal challenge, seven were still pending.

The court made no order to pay costs but Progressive has 28 days in which to make an application, while Foodstuffs has 35 days. The commission said it would not seek costs.

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