The New Zealand Commerce Commission has declined to grant clearance for Kegstar New Zealand Limited's proposed acquisition of Konvoy New Zealand Limited. This acquisition would have involved Kegstar acquiring kegs, beacons, and keg records from Konvoy, both of which are the only providers of pay-per-fill (PPF) services in New Zealand.

Chair Dr. John Small stated that the Commission was not convinced the merger would not substantially lessen competition in the PPF services market. The evidence indicated that Kegstar and Konvoy are direct competitors, and merging them would eliminate this competition. The Commission found no existing competitors to constrain the merged entity, and new entrants were deemed unlikely.

Dr. Small emphasized that the potential for some customers to self-supply would not be enough to prevent the merged entity from exercising market power. Furthermore, the Commission believed there was a significant chance that Konvoy could remain in the market and compete with Kegstar if the acquisition did not proceed.

The Commission is only allowed to grant clearance if it is satisfied that the merger will not substantially lessen competition. Throughout the review process, Kegstar agreed to several extensions as it failed to demonstrate that the acquisition would not harm competition.

Additionally, the proposed acquisition is under investigation by the Australian Competition & Consumer Commission (ACCC), which is also assessing the implications of the merger on competition.