KEY POINTS:
Auckland Airport is checking what implications new Commerce Commission information published today might have on its plan to move from two to one duty free operator.
The commission today gave its reasons for turning down an application by Hong Kong-based duty free operator DFS Galleria to buy all the shares in Swiss-based The Nuance Group.
The decision was originally made public in late March.
DFS Galleria operates duty free stores in Auckland and Christchurch, while Nuance operates stores, principally under the Regency brand, at Auckland and Wellington airports.
Auckland Airport today said it noted the commission's decision in relation to DFS and Nuance was separate from the commission's ongoing investigation into the airport's decision to move from having two duty free operators to one.
The airport said it was reviewing the commission's reasons in the Nuance decision for any implications they may have for its decision on the number of duty free operators at the airport.
Until that commission investigation was concluded any impact on duty free concession revenue to be received by the airport could not be determined, Auckland Airport said.
The airport considered it had not breached provisions of the Commerce Act.
The move from two duty free operators to one operator would improve the delivery of duty free retail services to the public at Auckland Airport, the airport said.
It would "enhance the depth and breadth of goods offered" and make it a more attractive and competitive shopping destination relative to other international airports.
Releasing the commission's reasons for the Nuance decision today, chairwoman Paula Rebstock said the proposed acquisition would see the removal of the competition posed by Nuance, she said.
Duty free consumers would no longer have a choice of duty free retailers, and no longer have the ability to compare prices between competing retailers at Auckland Airport.
The commission considered there was likely to be "very limited" competition from high street duty free retailers, and duty free retailers located at route-paired airports, Rebstock said.
"This competitive constraint would be likely to fall well short of the competition currently posed by Nuance."
The commission was also concerned that Auckland Airport would have little reason to constrain the combined entity's duty free prices, she said.
Further, the commission considered the airport would be unlikely to create an additional duty free concession, given the airport's policy of only having one duty free concessionaire.
- NZPA
