In a draft determination, the Commerce Commission has approved the merger of the wool scouring industry's main players.
Hawke's Bay wool scouring is likely be centred at one site after a draft Commerce Commission determination approving the merger of Cavalier Wool Holdings and New Zealand Wool Services International's operations.
About half of the firms' combined staff of 160 are within the region. Cavalier is New Zealand's largest scouring
operator based in Clive, Napier, and Timaru.
Australia-owned NZWSI operates wool scours in Napier and Christchurch and is New Zealand's largest exporter of wool. The merger would ultimately give Cavalier an industry monopoly but the anti-trust regulator's draft determination said public benefits outweighed any loss of competition.
"The commission considers there is the potential for Cavalier Wool Holdings to raise prices after the acquisition because of the loss of the constraining influence of New Zealand Wool Services International.
"However, as with our previous decision in 2011, we expect that the rationalisation of the wool scouring industry is likely to lead to lower production and administration costs, the freeing up of industrial sites, and lower ongoing capital expenditure requirements in the future," commission chairman Mark Berry said.
