The Commerce Commission has sent a Letter of Issues to Mainland Print in relation to its proposed acquisition of the heatset and coldset web offset printing assets of Inkwise Limited.

The Commission says it sends a Letter of Issues if, following initial investigations, the Commission has concerns about potential competition issues that may arise from the proposed acquisition. A Letter of Issues is not a final decision and does not mean that the Commission intends to decline or clear an acquisition.

A copy of the letter has been published on the Commission’s case register. Other interested parties may make submissions on the issues outlined in the letter if they wish to.

The Commission says it needs to further investigate some issues about the proposed acquisition by Mainland Print, a joint-venture company owned by Blue Star Group and Allied Press Limited.

The issues, which the Commission needs to investigate and analyse before reaching a decision on Mainland’s application, are whether the proposed acquisition would substantially lessen competition in the supply of coldset printing services in the South Island due to: unilateral effects by giving a combined Allied Press and Inkwise the ability to profitably raise prices and/or reduce quality to coldset printing customers in the South Island, as a result of the removal of a competitor; coordinated effects by making coordination more likely, complete or sustainable; and/or vertical effects by giving Allied Press the ability and incentive to foreclose competing newspaper publishers or raise their costs to render them less competitive in downstream reader and/or advertiser markets for daily and community newspapers.

The Commission discusses the issues in more detail in its letter.

It has requested that that other parties intending to make a submission on the issues in the letter provide their submission by Tuesday June 4 and that they provide a public version of their submission. It will publish all submissions received on its website with appropriate redactions. Mainland will have the opportunity to cross submit on the public versions of submissions from other parties. Other parties will also have the opportunity to cross submit on the public version of Mainland’s submission.

The Commission will not receive cross submissions after the close of business on Tuesday 11 June 2019.

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