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Queenstown’s Shotover Jet already had a degree of market power, the Commerce Commissioner said.
Plans to merge rival Queenstown jet boat companies have hit a snag with Commerce Commission concerns over the effects on competition.
Ngāi Tahu Tourism, which owns Shotover Jet, has applied to the Commission for approval to purchase KJet and its Time Tripper Underwater World Experience.
Shotover Jet and KJet, owned by Shaun Kelly and Skeggs Group, are the two largest commercial jet boat operations based in Queenstown.
Following a public submission process, the Commission issued a statement outlining its concerns about the competitive effects of the proposed acquisition.
Supplied/Stuff
KJet is the largest jet boat business operating on Lake Wakatipu from Queenstown
It said it was concerned the merged entity would be able to raise prices or lower the quality of services.
A merged Shotover Jet/KJet entity would have a substantial market share in terms of revenues, passenger numbers and capacity, the commission documents said.
Currently, Ngāi Tahu Tourism and KJet were close competitors and imposed competitive constraints on each other.
That constraint would be lost under a merger.
The only other jet boat company operating from Queenstown is the Real NZ-owned jet boats, but there was evidence that it was not an effective competitor in the supply of tourist jet boating services.
The other geographically close operators were much smaller. They were family-owned Skippers Canyon Jet and Glenorchy-based Dart River Adventures, also owned by Ngāi Tahu Tourism.
“We are currently not satisfied that other existing jet boat operators, in particular Real NZ (whose jet boat business is currently separately for sale), would be likely to materially constrain the merged entity,” the Commission document said.
Jet boat operators likely faced competition from other tourism operators in Queenstown, but the extent of constraint was unclear, it said.
The iconic nature of the Shotover Jet possibly also meant that Ngāi Tahu Tourism already had a degree of market power.
The Commission extended the period in which to make a decision until December 15.
It called for further submissions and supporting evidence on the issues it raised by November 10.
The Commission had not made any final decisions and would give clearance if it was satisfied that the proposed acquisition would not lessen competition.
supplied
Real NZ has Commerce Commission approval to purchase the Spirit Of Queenstown.
Earlier in October, the Commission granted clearance to Real NZ to purchase the tourist boat the Spirit of Queenstown from Southern Discoveries Limited.
Real NZ already offered trips across Lake Wakatipu on the TSS Earnslaw to Walter Peak High Country Farm.
The Spirit of Queenstown provided food and beverage-focused cruises on Lake Wakatipu, without transportation to an end destination.
The Commission was satisfied that Real NZ’s acquisition would not lessen competition.
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