Commerce Commission sets out 'potential competition issues' with Can Plan buyout proposal

The Commerce Commission is inviting submissions on potential competition issues into the proposed acquisition of the waste collection assets of Betta Bins by Nelson rubbish collection business Can Plan.
Family-owned Can Plan is seeking clearance from the Commerce Commission to buy Betta Bins. two side loader trucks, one rear loader truck, pre-paid wheelie bins, large bins and pay-as-you go rubbish bags in circulation. Betta Bins is the waste collection division of Nelson City Council-owned Nelmac Ltd.

The Commerce Commission this week released a Statement of Issues relating to the Can Plan application outlining potential competition issues including a potential loss of competition in the supply of residential rubbish collection services in Richmond, Stoke, Nelson City and east out to Cable Bay.

READ MORE:
* Commerce Commission invites submissions on Can Plan buyout proposal
* Can Plan seeks Commerce Commission clearance to buy Betta Bins

Martin De Ruyter/Stuff
Nelmac is a council-controlled trading organisation, solely owned by Nelson City Council. Betta Bins is Nelmacs waste collection division.

The commission says that at this stage, it is testing the potential for the proposed acquisition to substantially lessen competition due to horizontal unilateral effects resulting from a loss of competition in the supply of residential general waste collection services in the area of competitive overlap between the parties.

Horizontal unilateral effects arise when a business merges with or acquires a competitor that would otherwise provide a significant competitive constraint such that a market participant can profitably increase prices above and/or reduce quality below the level that would prevail without the merger.

Marion van Dijk/Stuff
The York Valley landfill at Nelson is the only operational landfill in the Nelson-Tasman region. It is a 50:50 joint venture between the Tasman District and Nelson City councils. (File photograph)

The commission is also testing the potential for the proposed acquisition to substantially lessen competition due to horizontal co-ordinated effects resulting from a change in market conditions making co-ordination more likely, more complete, or more sustainable in the supply of residential general waste collection services in the area of geographic overlap and potentially the wider Nelson-Tasman region.

While the commission's preliminary view is that the proposed acquisition may not substantially lessen competition in the supply of commercial or green waste collection services in the geographic area of overlap, we are continuing to investigate these questions, the Statement of Issues says. We also continue to investigate whether the proposed acquisition could give rise to a substantial lessening of competition in the supply of residential general and green waste collection services due to conglomerate effects.

MARTIN DE RUYTER/STUFF
Yuri Schokking, of Smart Environmental, at the opening of the Alchemy recycling sorting system in Richmond. Video first published in December 2019.

The commission is seeking submissions from Can Plan and Nelmac as well as other interested parties on the issues raised in the Statement of Issues, which can be found via its case register online.

Submissions are due by the close of business on April 7, with cross-submissions due no later than the close of business on April 14.

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