The Commerce Commission published a statement of preliminary issues yesterday relating to Wilson Parking NZ Ltd’s application to acquire leases for 10 carparks from Tournament Parking Ltd. They’re mostly standard, though some are elastic through interdependent variable factors.
Wilson Parking applied for clearance on 14 August. The commission said yesterday submissions on the application would close on Tuesday 8 September and it aimed to make its decision by 8 October, although that date might change as its investigation progressed.
Wilson Parking, owned by Raymond Kwok & family of Hong Kong, is New Zealand’s largest public parking provider, operating 270 parking facilities nationwide containing 30,000 parking spaces. The Wilson Group operates parking sites throughout Australia & Asia.
Tournament (James Brown & Simon Rowntree) operates 13 carparks in Auckland & Wellington after selling most of its other parking operations to Wilson Parking in 2013.
The commission investigated whether the 2013 acquisition substantially lessened competition, and said the evidence didn’t support a conclusion that it substantially lessened competition.
Companies related to Tournament own 9 of the sites and the tenth is independently owned. Wilson isn’t seeking to buy the sites or buildings.
The Auckland sites are at 81 Airedale St, 17-19 Nelson St, 459B Khyber Pass Rd & 9–13 Kent St in Newmarket, 16 St Benedict’s St and 6 West St off Upper Queen St
Among the issues the commission has highlighted:
“We will consider whether there are any restrictions on competing carparks that would prevent carpark operators from quickly & easily switching between different parking products. We will also consider whether private carparks place competitive constraints on public carparks.
“Wilson Parking submits that the relevant markets are comprised of overlapping zones of substitution affecting Auckland Central, Newmarket & Wellington Central. Our analysis of Wilson Parking’s 2013 acquisition noted that this approach was inconsistent with observed price variations across Auckland’s central business district. We will assess the geographic markets relevant to this acquisition, including whether they are narrower than those identified by Wilson Parking.
“Our investigation will focus on the closeness of competition between Wilson Parking’s carparks, the carparks to be acquired & other competitors. In particular, we will consider whether competing carparks possess sufficient spare capacity to absorb additional customers, were they to switch away from Wilson Parking’s parking operations.
“We will also consider the impact of onstreet parking, public transport & landlords on constraining Wilson Parking’s ability to raise prices above the existing levels or reduce the quality of its services.
“We will consider whether the typical lease structure disincentives aggressive pricing policies by placing the majority of the revenue risk on the operator rather than on the landlord.
“We will consider whether the transaction increases the potential for Wilson Parking & its competitors to co-ordinate their behaviour and collectively exercise market power, such that prices increase across the relevant markets. Specifically, we will consider whether there are features of these markets that may facilitate co-ordinated conduct, and whether the acquisition would enhance these features.
“We will assess whether entry by new competitors or expansion by existing competitors is likely, of sufficient extent and would occur in a sufficiently timely fashion to prevent a substantial lessening of competition.
“Of particular consideration will be whether being an incumbent leaseholder provides a competitive advantage such that entry or expansion, by way of successfully bidding for a lease, is unlikely to constrain any increase in market power by the merged entity.
“We will also assess entry through the creation of new carparks, giving consideration to the likelihood, extent & timeliness of entry in this form.”
17 August 2015, Wilson Parking seeks clearance to buy more of Tournament
Attribution: Commission release & register.