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Tip Top owner gets ComCom go-ahead to buy Dad’s Pies

4th November 2021 By Bridget O'Connell | bridget@foodticker.co.nz | @foodtickernz

The baking behemoth that owns bread brands Tip Top and Ploughmans and pie company Big Ben has received sign-off from the Commerce Commission to buy rival Dad’s Pies.

The sale of Dad’s Pies will create top three competitor in the NZ market.

The deal will see George Weston Foods add privately-owned Dad’s Pies Limited’s retail and wholesale business to its portfolio, creating a top three New Zealand competitor alongside Goodman Fielder and Goodtime Pies.

Commissioner Dr Derek Johnston said that the commission was satisfied that the acquisition was unlikely to substantially lessen competition in any New Zealand market.

“Our investigation found that GWF and DPL are not each other’s closest competitors in New Zealand,” he said.

“Customers consider Big Ben to be a ‘base’ or ‘mainstream’ pie, whereas Dad’s Pies are considered to be ‘premium’ pies.

“We also found that GWF and DPL compete against several large and well-resourced competitors, including from Australia. Post-merger, we expect that the merged entity will face significant competition from these players for all the different types of customers they supply.” 

Auckland-based DPL was founded in 1981 by Edward and Frederika Grooten, and was currently led by general manager Tom Grooten.

Both GWF and DPL manufacture and supply savoury pies and sausage rolls in New Zealand. They sell these to a variety of customers including supermarkets, dairies, convenience stores, petrol stations and food distributors, which supply cafes and restaurants.

GWF sells its pies and sausage rolls under the ‘Big Ben’ brand. DPL sells its products under ‘The Baker’s Son’ brand to supermarkets, and under the ‘Dad’s Pies’ brand everywhere else.

In its application to the watchdog, GWF said it and DPL were in the top six largest competitors in the wholesale pie sector, alongside Goodman Fielder, Goodtime, Richmond Foods and Gourmet Foods.

These six companies had a combined market share of 70%-80%, with a long tail of smaller bakers including in-house bakeries that comprise the other circa 25%.

DPL said that should the proposed deal go ahead, the three largest firms in the market would have less than 70% market share.

It also calculated that the merged firm’s market share would be less than 40%, so would be “unlikely to give rise to any competition concerns”.

 

 


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