Commerce Commission clears tofu producers Life Health Foods NZ and Chalmers Organics to merge
Tofu continues to be a popular alternative to meat.
The Commerce Commission has cleared tofu maker Life Health Foods NZ to acquire the business and assets of competing tofu maker Chalmers Organics.
Both companies supply vegetarian and plant-based products, including tofu and meat alternatives, to supermarkets, stores and the restaurant industry.
The commission said the supermarkets’ “significant buying power” would prevent unjustified price increases by the merged entity.
Life Health Foods NZ is a registered charity owned by the Seventh Day Adventist Church.
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Chalmers Organics is equally owned by Elizabeth, Daniel, Jesse and Stephen Chalmers.
The commission considered the potential impact of the merger on competition in national markets for the wholesale supply of tofu and, separately, meat substitutes to major food retailers and other customers.
Commerce Commission Chair Anna Rawlings said the commission was confident the acquisition was unlikely to significantly lessen competition.
The Commission found that there were several small tofu manufacturers that supplied retailers and, if encouraged, could increase their supply of tofu, she said.
“Also, most tofu is sold by major grocery retailers,” Rawlings said.
“Foodstuffs and Woolworths hold significant buying power and are able to prevent unwarranted price increases by the merged entity through their ability to source tofu from competing suppliers.”
In the market for the supply of meat alternatives, the commission felt that the presence of other suppliers would limit the merged entity, she said.
“Our investigation has identified a number of recent entrants, particularly from overseas, into the supply of meat alternatives that will limit the merged entity,” Rawlings said.
Life Health Foods brands include Bean Supreme, Alternative Meat Co., Vegie Delights and Lisa’s.
Chalmers Organics is based in Auckland and manufactures products under its Tonzu and Zenzo brands.
The commission authorizes a proposed merger if it is satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.