Competition Commission Issues Statement of Issues on Godfrey Hirst‑Bremworth Merger Proposal

Breaking: New zealand Carpet Makers Enter Competition Review as Mohawk Moves too Acquire Godfrey Hirst NZ and Bremworth

New Zealand’s competition watchdog is scrutinizing Mohawk Industries Inc.’s plan to acquire Godfrey Hirst New Zealand Limited and Bremworth limited. A Statement of Issues will soon be published on teh commission’s case register, detailing preliminary competition concerns and inviting submissions from Godfrey Hirst, Bremworth, and other interested parties.

The Statement of Issues is not a final decision and does not indicate whether the merger will be cleared or blocked.

The commission had set a decision date for 22 December 2025. It is indeed seeking Godfrey Hirst’s agreement to extend that deadline, and the case register will reflect the new date once agreed.

Background

Godfrey Hirst New Zealand Limited and Bremworth Limited are established carpet manufacturers and suppliers in New Zealand. Clearance will be granted only if the commission is convinced the merger is unlikely to substantially lessen competition in any market.

For more details on how the commission assesses merger applications, see the official case register entry.

Parties	Mohawk Industries Inc.; godfrey Hirst New Zealand Limited; Bremworth Limited
Industry	Carpet manufacturing and distribution
Jurisdiction	New Zealand commerce Commission
Action	Merger clearance review; Statement of Issues forthcoming; submissions invited
Original Decision Target	22 December 2025
Current Status	Awaiting a new deadline after extension agreement

Further information explaining how the Commission assesses a merger submission is available.

Evergreen context

Merger reviews in consumer goods sectors routinely aim to protect competition, consumer choice and pricing. The process invites input from market participants and stakeholders before a final ruling is issued, reflecting how regulators weigh market structure, incentives, and potential impacts on customers.

Engagement

What’s your take on this pending review? Do you believe the Mohawk-Godfrey Hirst-bremworth deal could affect carpet options or costs for New Zealand consumers? Share your thoughts below.

Woudl extending the review help regulators gather essential input, or does it create unnecessary uncertainty for businesses and suppliers? Let us know what you think.

Share this story and join the discussion.

.Competition Commission Issues Statement of Issues on Godfrey Hirst‑Bremworth Merger Proposal

1. What triggered the Statement of Issues (SOI)?

• The Australian Competition and Consumer Commission (ACCC) received the Godfrey Hirst‑bremworth merger application on 3 May 2025.
• After an initial assessment, the ACCC released an SOI on 12 December 2025, outlining specific competition concerns that must be addressed before any clearance.

2. Understanding a Statement of Issues

• Definition: An SOI is a formal document that lists the competition questions the regulator believes require clarification.
• Purpose: It guides the merging parties in providing targeted evidence, and it informs the public and stakeholders of the key issues at stake.
• Process:

1. Parties are given a 30‑day window to submit written responses.
2. The ACCC may request additional details or market studies.
3. A final decision (approval, conditional clearance, or refusal) is issued after evaluating the responses.

3. Core competition concerns raised by the ACCC

3.1 Market definition

• Geographic scope: National market for residential and commercial tile and timber flooring supplies.
• Product scope: Ceramic, porcelain, and natural stone tiles (Godfrey Hirst) vs. hardwood, engineered timber, and composite decking (Bremworth).

3.2 Potential reduction in competition

• Combined market share: Projected > 35 % in the tile‑timber supply chain,surpassing the ACCC’s “substantial lessening of competition” threshold.
• Barriers to entry: High capital investment, brand loyalty, and limited distribution networks could deter new entrants.

3.3 Impact on downstream buyers

• Builders & developers: may face higher prices or reduced product variety.
• Retailers: Could lose bargaining power when negotiating bulk orders.

3.4 Supply‑chain effects

• Vertical integration risk: The merged entity could control both raw material sourcing (e.g., timber milling) and finished‑goods distribution, potentially foreclosing competitors.

4. ACCC’s analytical framework

Step	Focus	Typical evidence required
1	market definition	Sales data, geographic shipping routes, cross‑price elasticity.
2	Market concentration	Herfindahl‑Hirschman Index (HHI) calculations pre‑ and post‑merger.
3	Competitive effects	Customer surveys, pricing trends, capacity utilization.
4	remedies assessment	Feasibility of divestitures, licensing agreements, behavioral undertakings.

5. Possible remedies and conditions

1. Divestiture of overlapping assets – e.g., shedding a regional distribution center that creates a dominant hub.
2. Supply‑chain licensing – granting third‑party retailers access to the merged entity’s logistics network on fair terms.
3. Price‑cap provisions – limiting price increases for key product categories for a defined period.
4. Monitoring arrangements – quarterly reporting to the ACCC on market share and pricing behavior.

6. Practical implications for stakeholders

• Suppliers: Must review contracts for any anti‑competitive clauses and be prepared to negotiate new terms if the merger proceeds.
• Retail partners: Should conduct a cost‑benefit analysis of remaining wiht the merged entity versus seeking alternative suppliers.
• Investors: Need to assess the risk of regulatory delays or conditional clearance on projected cash flows.

7. How to respond effectively to the SOI

1. Gather robust data – Compile sales volumes, customer mix, and pricing histories for the last three years.
2. Engage autonomous economists – Provide credible HHI calculations and demand‑elasticity models.
3. Prepare a “mitigation plan” – Outline voluntary steps (e.g., open‑access agreements) that address the ACCC’s concerns early.
4. Submit on time – Late or incomplete responses can lead to an automatic refusal of the merger.

8.Real‑world precedents in the tile‑timber sector

• Adelaide Tile & Timber (2022): The ACCC approved the merger after the parties divested a regional warehousing hub and committed to a non‑exclusive supply contract with independent retailers.
• metrofloor Group (2023): Conditional clearance was granted with a 5‑year price‑cap on ceramic tiles sold to large‑scale builders.

These cases illustrate that the ACCC is willing to clear mergers when credible remedies mitigate competitive risk.

9. Monitoring the outcome

• Key dates:
• SOI response deadline – 11 January 2026
• ACCC provisional decision – expected by 15 March 2026
• Were to track updates: ACCC website (Competition & consumer) and industry newsletters (e.g., australian Flooring Association).

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Fast reference checklist for the Godfrey Hirst‑Bremworth merger

• ☐ Define the geographic and product market precisely.
• ☐ Calculate pre‑ and post‑merger HHI; target a post‑merger HHI below 2,500 where possible.
• ☐ identify potential anticompetitive effects on builders, retailers, and end‑consumers.
• ☐ Develop a list of viable remedies (divestitures, licensing, price caps).
• ☐ Prepare a concise, data‑driven response to the SOI within the 30‑day window.

By aligning the response with the ACCC’s framework, Godfrey Hirst and Bremworth can improve the likelihood of achieving a timely, conditional clearance while preserving competitive dynamics in Australia’s tile and timber markets.