Rasmusen's Egg Farm seeks Commerce Commission approval for major North Island merger

Rasmusen's Egg Farm, owned by third-generation farmer Aaron Rasmusen, is looking to merge egg producation wholesale operations with Heyden Farms and Henergy Cage-Free. Photo / Bevan Conley

Whanganui egg farm Rasmusen's is seeking Commerce Commission clearance to merge its egg production and wholesale operations with two other North Island egg producers.

The proposal is to merge Rasmusen's Poultry Farms Ltd with Lichfields Heyden Farms and Masterton's Henergy Cage-Free Ltd.

The parties would merge the entirety of their operations into a single entity, transferring their shares and forming a new company called Better Eggs Ltd.

The application says the proposed merger will provide an entity with scale, balance-sheet strength and access to cost-effective production, allowing it to invest and innovate in ways that drive efficiencies.

Rasmusen's, which has been producing eggs in Whanganui for almost 80 years, is 100 per cent owned by third-generation poultry farmer Aaron Rasmusen.

It sells eggs under the Morning Harvest and New Day brands as part of the Independent Co-Operative, as does Heyden Farms.

The two are in the process of leaving the co-op, and will sell their respective shareholdings to facilitate the exit and give effect to the proposed merger.

Rasmusen's has a 6.8 per cent shareholding in the co-op.

Some physical assets owned Rasmusen's, Heyden Farms and Henergy will be sold directly to the new holding company as part of the merger.

The three businesses began discussions of a possible merger in mid-March.

Rasmusen's declined to comment until the outcome of the proposed merger is finalised.

In the application, the three entities highlight several developments in the egg production and wholesale market.

Changes in regulations have meant traditional cage-farmed eggs are falling out of favour with supermarkets and consumers.

Eggs can be farmed in several different ways, including cage-farmed, barn-laid and free-range.

Cage-farming places laying birds in small, confined cages, and includes 'colony farming' where larger numbers of laying birds are housed in larger cages, providing more space for each bird.

Barn-laid eggs don't use cages but instead confine laying birds in an enclosed facility.

Free-range gives laying birds freedom to move around in outdoor areas.

Major supermarkets, which represent about 60 per cent of the buyers' market, have indicated they would not be stocking colony farmed eggs in the future.

Woolworths NZ, which also runs Countdown, SuperValue and FreshChoice, aims to stop stocking colony-farmed eggs by 2025.

Foodstuffs, which operates Four Square, New World and Pak'nSave, is aiming to do the same by 2028.

These moves are likely to make barn-laid and free-range eggs, which were previously viewed as premium in the marketplace, more mainstream.

A decision is due to be made by the Commerce Commission by September 18.