Commerce Commission clears Moana to buy Sanford’s North Island inshore fishing business

Iwi-owned fishing company Moana New Zealand has been cleared to buy the North Island inshore catch rights from rival Sanford, making it the largest inshore fisheries company in Aotearoa.

The Commerce Commission has approved the deal that will see Moana lease the catch entitlement from Sanford for at least 10 years. Sanford would retain ownership of the quota.

Inshore fisheries are those out to 12 nautical miles from the New Zealand coast.

Under the deal, Moana will take over the catching, processing and selling of fish utilising the catch rights, helping it achieve economies of scale at its Auckland processing plant. For Sanford, the deal is an opportunity for an unprofitable part of its business to generate a low-risk income stream, and turn its focus to higher growth areas.

“Moana is exceptionally well placed to take on the additional catch and processing volumes with a proven track record of success in inshore operations, perishable goods supply chain management, with upgraded facilities built with growth in mind,” Moana chief executive Steve Tarrant said in a statement.

“This additional capacity provides opportunities for Māori beyond just fishing. It brings scale which will enable investment in innovation and science that align with our values of kaitiakitanga and manaakitanga.”

Tarrant said the transaction was subject to one remaining commercial condition, which it was working with Sanford to promptly satisfy now that it had the required regulatory approval.

Sanford acting chief executive Craig Ellison welcomed the Commerce Commission approval.

“Our mind now moves forward to ensuring satisfaction of the other condition and smooth execution of the detail necessary to complete the transaction,” he said. “This will involve consideration for the future of some of our staff and some of our inshore processing assets.”

Sanford, New Zealand’s largest fishing company, has been reviewing its unprofitable North Island inshore operations over the past year as it faced increased costs, labour constraints, the impact of Covid-19 and mulled the future of its factory in a high density residential area in Auckland’s CBD.

It had considered building a new modern site in Auckland, but the cost to redevelop and relocate the factory was prohibitive and would not deliver an acceptable return on investment. It had also considered partnering with another industry player or exiting the business completely.

Under the deal, Moana would pay $11 million a year for the first year of the catch entitlement, scaling up to $13m over the next five years, with payment then increasing at 1.5% a year.

It is expected to pay an extra $5m to $8m for two of Sanford’s North Island-based fishing vessels and other fisheries equipment, and a marine farm.

Sanford has said more than 100 staff would be impacted if the deal went ahead and that it would work with Moana to facilitate the employment of affected staff where practicable.

Moana has previously said it needed more people and was interested in talking to impacted staff at Sanford about the possibility of new roles.

Sanford has been evaluating the future of its Wynyard Quarter processing site in Auckland’s CBD, an area that it said has undergone significant change and is now very residential.

Shares in Sanford were unchanged at $3.82 in midday trading on the NZX on Wednesday.