Ian Morrice gave evidence yesterday. Photo / Mark Mitchell
Ian Morrice gave evidence yesterday. Photo / Mark Mitchell
KEY POINTS:
The Warehouse chief executive, Ian Morrice, yesterday added his 2c worth to the High Court hearing in Wellington which may open the door to a $2.5 billion offer for his company.
Supermarket rivals Foodstuffs and Woolworths are appealing against the Commerce Commission's refusal to allow either of themto take control of the Red Sheds.
The Warehouse last month "joined" the Foodstuffs and Woolworths appeal, but its board and management say they are indifferent to the eventual outcome.
Chairman Keith Smith in August said The Warehouse board only wanted to "ensure the company was appropriately placed to provide such market and other relevant evidence as the High Court may require to determine the appeals".
The basis of the commission's June decision was that a takeover by either of the two dominant supermarket operators would remove an important source of real or potential competition in the grocery market.
The Warehouse moved into grocery retailing comparatively recently with three Warehouse Extra stores which combine a supermarket offering with general merchandise.
The commission says that the "super centre" model has proved successful overseas and would provide valuable additional competition in what is a virtual supermarket duopoly in this country.
However, Woolworths' lawyer David Goddard QC indicated this week that The Warehouse's July decision to postpone plans for further Extra stores was a crucial development.
Goddard and his Foodstuffs counterpart Iain Thain have told Justice Jill Mallon and the Australian Competition and Consumer Commission's Professor Stephen King that the Extra stores are not, and are unlikely to ever be, a source of serious competition.
Morrice's evidence, which was off limits to the media and public, was expected to shed further light on the Extra stores' performance so far and plans to further develop the concept.
Should Foodstuffs and Woolworths' appeal succeed, an offer for The Warehouse around the $2.5 billion mark or even a bidding war is expected to follow in short order.
