A competition lawyer has blasted the High Court for overturning a Commerce Commission ban on sale of The Warehouse Group and urged the commission to go to the Court of Appeal.
Simpson and Grierson competition law partner Peter Hinton says the High Court, which released its reasoning last
week, was too willing to believe the grocery giants.
The court had been prepared to make findings that were contrary to intuition and the expertise of the Commerce Commission. Consumers and participants were entitled to greater clarity, Hinton writes in a Simpson Grierson article published yesterday.
The commission has until mid-January to decide whether to appeal against the decision.
The market has dismissed commission concerns but the comments will encourage the regulator, which has been a lone critic of the competition issues surrounding The Warehouse and its Warehouse Extra grocery offering.
One market analyst last week described the High Court decision overturning the commission ban as a "slam dunk", but Hinton said the High Court decision raised "extremely important issues" and urged the commission to appeal.
There was no evidence the court had treated evidence from Woolworths or Foodstuffs with even a scintilla of scepticism, he said.
Overseas it was generally accepted that evidence put forward by direct stakeholders should generally be discounted as self serving.
The court had unquestioningly accepted that Woolworths and Foodstuffs were genuinely interested in acquiring The Warehouse for general merchandise and the possibility they might be protecting their market position was never discussed.
"In almost every critical respect the court appears to have sided with the applicants on grounds that will, if they do nothing else, raise legal and regulatory eyebrows."
The court had come to a remarkable conclusion, that there was a real prospect that The Warehouse Extra grocery offering - whose development was at the heart of the case - would be abandoned. Hinton questioned the approach to the effect of Warehouse Extra on suppliers.
The commission had raised issues about collusion between the two parties, but the court found them to be inconclusive, leading Simpson Grierson to ask if the court had shown a "leap of faith".
