Progressive wins Privy Council appeal

The supermarket operator, which owns the Foodtown, Countdown and 3 Guys stores, had appealed a New Zealand legal ruling that stopped it from pursuing the acquisition of Woolworths NZ from Hong Kong-based Dairy Farm.

The saga dates back to July last year when the Commerce Commission cleared Progressive's application for permission to buy Woolworths, claiming the merged company would not would not acquire or strengthen dominance in any market.

However rival supermarket operator Foodstuffs took legal action, claiming the deal should be judged under the more strict criteria of "substantially lessening competition" in a market.

A Court of Appeal decision forced Progressive to apply under the stricter criteria but that application was turned down by the Commerce Commission.

In January this year Progressive said it would take its case to the Privy Council, which has allowed the appeal.

"The effect of the Privy Council decision is to validate the decision of the NZ Commerce Commission to grant Progressive a clearance to bid for Woolworths NZ," says Progressive's owner, Perth-based Foodland (NZSE: FAL).

"This clearance had been opposed by Progressive's competitor Foodstuffs Auckland 1 of the 3 Foodstuffs co-operatives which together hold approximately 55% of the NZ grocery market."

FAL group MD, Trevor Coates, says the company is delighted with the Privy Council decision.

"Our next step will be to contact Dairy Farm International, owner of Woolworths NZ, to reconfirm our interest in acquiring that business.

"If agreement can be reached the combined businesses will have a significantly improved capacity to compete with the dominant Foodstuffs Co-operatives. This is very good news for all food shoppers in New Zealand.

As well as the Progressive business Foodland also owns the Farmers department store chain in New Zealand.

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