Union tracks merger of Heinz Watties and Cerebos Greggs

The Heinz Watties facility in Hastings employs more than 500 permanent employees and up to 800 seasonal workers. Photo/File

A proposed merger of two huge food manufacturers is not expected to have an immediate impact on jobs at the Hastings Watties factory but the manufacturing and food workers union says it is keeping a close eye on the situation to make sure.

After the Commerce Commission issued a statement of preliminary issues relating to an application from H. J. Heinz Company (New Zealand) (Heinz Wattie's) to acquire the food and instant coffee business of Cerebos Gregg's the E tu union said it would take a "wait-and-see" approach to the proposal.

"At this stage, we have no specific concerns about the proposed sale" Phil Knight, E tū's industry co-ordinator for the food sector said.

"From what we understand there is likely to be no direct impact on jobs. Cerebos Greggs New Zealand operations produces completely different food products to those made by Watties in New Zealand, as we understand it.

"But, we are adopting a wait-and-see approach. That's because we are always nervous whenever Kraft-Heinz buys any company, given its track-record here and overseas."

The Commerce Commission's statement outlines the main issues it considers important in deciding whether or not to grant clearance to the proposed merger.

The commission will investigate whether the proposed merger is likely to substantially lessen competition in the relevant markets by looking mainly at the" unilateral effects" that might result from the merger.

"In particular, we will consider whether the merged entity would be able to raise prices above the prevailing level", the statement said.

"We will also look at whether the proposed merger is likely to result in co-ordinated
effects. That is, whether the merged entity would be able to co-ordinate with rivals to
raise prices."

The commission has called for submissions on the merger and is expected to make a decision on the application by February 15, 2018.

The Watties operation in Hastings was the first to be established by James Wattie in 1934. There are now two manufacturing facilities in the area.

The King St site is the original home of Watties' operations and now employs more than 500 permanent employees and up to 800 seasonal workers.