Fair competition regulator probing ice deal
The deal struck between Norbrook Equity and Pure National for an ice-manufacturing joint venture is being investigated by the Fair Trading Commission, FTC, to assess the legal and economic impact on competition.
The report should be complete in mid-January 2020 and a redacted version released thereafter.
“We need to know how the deal affects the businesses of other players and we need the data to make a proper assessment. We have a responsibility to all players in the market,” said David Miller, executive director of the FTC in a Financial Gleaner interview on Monday.
The competition watchdog said the investigation is being conducted under Section 17 of the Fair Competition Act, which applies to agreements which have as their purpose or effect the substantial lessening of competition.
“Both companies were major suppliers of ice and distributed ice at the wholesale and retail levels across Jamaica to hotels, supermarkets, restaurants and gas stations. The acquisition raises competition concerns as two major players in the ice industry have come together under common control,” said the FTC. “As part of its investigation the FTC has sought from other market players their views on the acquisition and how it has or may affect them.”
Happy Ice, which is owned by Norbrook Equity, merged with Pure National Ice Company Limited, PNIC, in 2018 to form Pure National Limited, PNL. PNIC was founded four to five years ago by Peter Buckley and a group of investors. Norbrook is headed by Khary Robinson.
Happy Ice and PNIC still operate from their separate complexes in Kingston at Spanish Town Road and Marcus Garvey Drive, respectively.
Pure National Limited planned to build a $350-million ice-making plant that’s intended to position the joint venture as the largest ice business in the English-speaking Caribbean
Each partner in PNL reportedly holds a 50 per cent stake, and they both share management responsibility for the merged entity, and the three brands it represents – Happy Ice, Kingston Ice and Pure National Ice.
The new ice plant would reportedly double PNL’s ice production capacity, which stands at 4.5 million bags annually.
The ice market comprises half a dozen registered players but a number of unregistered ones in the market. The FTC expected to finish the report this year but data from other members in the sector took time to gather. It resulted in the report’s timeline extending into 2020.
The report’s conclusion and recommendations will “depend on the outcome of the report, its affect on competition and if any laws were breached,” added Miller.
Robinson was not reached for comment.