FTC gives thumbs up to ice merger
Competitors are cool with the merger of two large ice brands, Happy Ice and Pure National, according to Fair Trading Commission, FTC, in its preliminary findings into the business combination from a probe that wrapped up in December.
“We do not see any harm to competitors and to consumers. When we examine the matter, we saw that there were a number of viable competitors, which are offering significant constraints to the merged company,” said FTC Executive Director David Miller in a Financial Gleaner interview on Tuesday.
A redacted report is slated for release in coming weeks.
The FTC described the market for ice as open for price competition. The agency found that there were several competitors operating effectively and offering similar products, and that consumers were able to switch from one supplier to another.
But it also found that the merger has resulted in the market for packaged party ice becoming “significantly more concentrated” as a result of the agreements.
The ice market comprises about six registered players and an equal number of unregistered operations. Miller said that during the investigation, no respondent mentioned merging with other entities to compete. Rather, two players noted that they were in the process of expanding operations organically.
Happy Ice, owned by Norbrook Equity, merged with Pure National Ice Company, PANIC, in 2018 to form Pure National Limited, PNL. PANIC was founded four to five years ago by Peter Buckley and a group of investors. Norbrook is headed by Khary Robinson. Happy Ice and PANIC still operate from their separate complexes in Kingston at Spanish Town Road and Marcus Garvey Drive, respectively.
The FTC stated that the merger raised concerns about the joint venture’s ability to exercise market power and “adversely” affect competition.
“However, such exercise of market power is unlikely as the conditions for market entry and expansion are sufficient to allow new players and existing competitors to constrain PNL,” the fair trade watchdog said in its preliminary finding dated January.
Miller said that despite the large distribution network of PNL, small local players, particularly in Montego Bay and Trelawny, were able to match prices.
Pure National and Happy Ice supply ice to wholesalers and retailers across Jamaica. These companies resell to hotels, supermarkets, restaurants and gas stations.
Pure National Limited plans 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 is expected to double PNL’s ice production capacity, which stands at 4.5 million bags annually.