Under the Commerce Act, the merger can be cleared only if the regulator is satisfied it is unlikely to lessen competition in any relevant market.<\/p>\n
The three companies are one another\u2019s closest rivals on the Kaituna River, one of New Zealand\u2019s premier rafting destinations. <\/p>\n
Their merger was proposed last November, as a way of battling rising Department of Conservation (DoC) concession fees and climate change pressures.<\/p>\n
The proposal had the early backing of key stakeholders, including RotoruaNZ, Tourism Industry Aotearoa and Contiki NZ. The Backpacker Youth Adventure Tourism Association added its support in February.<\/p>\n
The commission had previously issued another statement detailing its concerns, which Rafting JV Co \u2013 the proposed new combined entity \u2013 responded to in March.<\/p>\n
The commission\u2019s latest statement of issues said preliminary evidence suggested the rafting businesses competed directly on price, service quality and customer experience.<\/p>\n
Whitewater rafting at Okere Falls near Rotorua. Photo \/ Christine Cornege<\/p>\n
\u201cThe commission is not currently satisfied that the proposed joint venture would not substantially lessen competition,\u201d the document, released on April 30, stated.<\/p>\n
The commission noted significant barriers to entry for new operators in the market, including limited DoC concessions, capacity constraints on the Kaituna River and regulatory requirements.<\/p>\n
It warned that the merged entity could gain market power, enabling higher prices or reduced service quality.<\/p>\n
The commission questioned whether Rotorua rafting was a standalone market.<\/p>\n
It said it was unclear whether the city\u2019s other adventure tourism offerings would provide competition to constrain prices for a merged grade-five rafting operation.<\/p>\n
While some were similar in price, they were often different in thrill level and duration.<\/p>\n
Geography was also a factor, with the commission unconvinced rafting operators in Taup\u014d or Queenstown would constrain competition, given limits on tourists switching locations.<\/p>\n
Rotorua Rafting\u2019s Sam Sutton told Local Democracy Reporting he was \u201cnot surprised\u201d at the latest developments and said, in his opinion, the commission had \u201cmade [its] mind up from the start\u201d. <\/p>\n
He said he was \u201cpersonally frustrated\u201d at suggestions that the quality of the experience would decline.<\/p>\n
\u201cNot many businesses in Rotorua have 3000 five-star reviews each,\u201d he said. <\/p>\n
\u201cIf we were to drop the quality, then firstly, people would stop coming, and secondly, you\u2019d have a very dangerous situation for those taking part.\u201d<\/p>\n
Rotorua Rafting\u2019s Sam Sutton. Photo \/ Andrew Warner<\/p>\n
He said he believed the commission should focus on big businesses like food retail and fuel providers, rather than on a potentially \u201cshort-sighted\u201d decision that could restrict small businesses.<\/p>\n
\u201cHave they been to the gas station recently?\u201d he said.<\/p>\n
\u201cIn the current climate, when prices are going up on everything, it just feels like [the commission is] removed from the reality of the world. I\u2019d like to see them worry about things that actually impact society.\u201d<\/p>\n
He said new DoC levies, which would amount to roughly 40% of the bottom line, would have a \u201chuge impact\u201d on the rafting businesses.<\/p>\n
\u201cIt\u2019ll be interesting to see how everybody goes when it\u2019s time to pay that bill.\u201d<\/p>\n
Sutton said the parties involved in the merger had yet to discuss whether they will continue to pursue it, given the most recent statement from the commission.<\/p>\n
Without it, he suggested things would continue as they currently were, and he expected the businesses to struggle with the emerging challenges.<\/p>\n
A commission spokesperson said it was legally required to issue a statement of unresolved issues if it was not satisfied the information provided showed the acquisition would not substantially lessen competition.<\/p>\n
\u201cWe have not reached a final view on the proposed acquisition,\u201d the spokesperson said. <\/p>\n
\u201cAny suggestion otherwise is factually incorrect.\u201d<\/p>\n
Regarding investigation of fuel and supermarket retailers, the commission highlighted its action against two Auckland Pak\u2019nSave stores<\/a>, and an \u201congoing\u201d case against Mobil<\/a> for alleged petrol price breaches.<\/p>\n The commission has called for further submissions on the Rotorua matter from interested parties by May 14, with cross-submissions due by May 25.<\/p>\n A final decision is expected by June 18, unless the timeline is extended.<\/p>\n Mathew Nash is a Local Democracy Reporting journalist based at the Rotorua Daily Post. He has previously written for SunLive, been a regular contributor to RNZ and was a football reporter in the UK for eight years.<\/p>\n \u2013 LDR is local body journalism co-funded by RNZ and NZ On Air.<\/p>\n","protected":false},"excerpt":{"rendered":"Under the Commerce Act, the merger can be cleared only if the regulator is satisfied it is unlikely…\n","protected":false},"author":2,"featured_media":266437,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[1972,138,13849,7520,3088,2371,8556,3468,127,71,37367,2454,702,7810,28126,111,139,69,9617,29056,151792,1327,38715,8983,5652,1886,10097,183505],"class_list":["post-413514","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-block","tag-business","tag-citys","tag-commerce","tag-commercial","tag-commission","tag-companies","tag-deal","tag-despite","tag-from","tag-frustrated","tag-industry","tag-it","tag-may","tag-merger","tag-new-zealand","tag-newzealand","tag-nz","tag-player","tag-proposed","tag-rafting","tag-rotorua","tag-rotoruas","tag-signals","tag-signs","tag-support","tag-tourism","tag-whitewater"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/413514","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=413514"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/413514\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/266437"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=413514"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=413514"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=413514"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}