SLM to Lion
Lion Breweries, Ltd, has received approval from the Commerce Commission to buy the 50 per cent of Super Liquor Man Holdings, Ltd, it does not already own, and also the outstanding 90 per cent of the shares in Christchurch Wholesale Liquor, Ltd. But both acquisitions are subject to conditions. In particular that Super Liquor Man Smust sell its existing outlets in Napier, Palmerston North and Petone, and at Warner’s Hotel in Christchurch, and two wine shops in Wellington. None may be sold to Lion interests.
If any of the outlets cannot be sold, then they will be closed and Lion will not be able to use the liquor licences attached to the unsold outlets. This is the second application that Lion has made to take over the liquor chain in less than a year. The first application was withdrawn after the commission decided to hold a public inquiry into the proposal because of advice from the Examiner of Commercial Practices. This time Lion has offered to sell seven outlets and retain three — one each in Auckland, Wellington, and the Christchurch wholesale liquor outlet.
The commission has accepted the offer because SLM is in financial difficulty, with a marked profit decline in the last year, a substantial net loss in the year to April 30, 1984, and severe liquidity problems. The chain’s asset backing and its equity amount has fallen, giving virtual control of its resources to its creditors, Lion in particular, the commission says. The chain has little prospect of trading its way out of difficulty, and some of its outlets are not in themselves economically viable. The commission’s original concern about the SLM takeover was that Lion would get a big boost from holding more liquor outlets. The examiner believed that the move would significantly increase Lion’s "horizontal” market power in all geographic, markets involved, except Christchurch, and increase its market shares. The examiner had said that the take-over was likely to produce an “undue aggregation” of wholesale hotel and tavern outlets in Lion’s hands,
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Bibliographic details
Press, 14 March 1985, Page 31
Word Count
339SLM to Lion Press, 14 March 1985, Page 31
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