One river, zero remaining competitors
In November 2025, a joint venture called Rafting JV Co applied to the Commerce Commission for clearance to combine all three of Rotorua’s commercial rafting operations: Rotorua Rafting, Kaitiaki Adventures, and Kaituna Cascades. If approved, the merged entity would hold 100% of the guided rafting market on the Kaituna and Rangitāiki Rivers from day one.
The Commission missed its original January 2026 deadline and published a Statement of Issues on 5 February 2026 flagging competition concerns. A decision was scheduled for 14 April 2026, with the possibility of further extension. The case has now been open since 12 November 2025 – more than five months of regulatory process for a tourism business merger that, in dollar terms, is almost certainly modest.
The definition that decides everything
The entire case hinges on a single question: what is the relevant market?
The applicants argue the market is Rotorua adventure tourism broadly – zip-lining, mountain biking, thermal attractions, and everything else competing for tourist dollars. Under that framing, the merged entity is one player among many.
The Commission is likely to define the market more narrowly as the supply of guided rafting trips. Under that framing, it is a monopoly, full stop.
The operators’ counter-argument is intuitive. Rafting is discretionary. If prices rise, tourists simply choose a different activity. But intuitive is not the same as legally sufficient. The Commerce Act’s clearance test asks whether competition will be substantially lessened within a defined market, not whether demand is elastic.
Entry barriers are not theoretical
Even if the Commission accepted the broader market definition, it would still need to be satisfied that new entrants could constrain the merged entity’s pricing. The barriers it identified are substantial: Department of Conservation concessions on the Kaituna River are limited and not freely available, river capacity is physically constrained, upcoming resource consent requirements add cost, and WorkSafe compliance creates further overhead.
A potential competitor cannot simply buy rafts and start operating. The regulatory stack alone represents months of lead time and significant capital outlay, all for a market that may not support a fourth operator anyway.
The Commission’s own research cuts against the applicants
In February 2024, the Commission published an ex-post merger review examining 12 past cases. Its finding was pointed: the likelihood and extent of potential entry is commonly overstated by market participants. It also found that countervailing buyer power arguments tend to be exaggerated.
The rafting operators are making precisely these arguments – that tourist choice constrains pricing, and that potential entry disciplines behaviour. The Commission’s institutional learning says: prove it.
The law has no answer for markets too small to compete
Here is the structural problem no one in this process is empowered to solve. New Zealand’s Commerce Act contains no small-market exemption. There is no formal mechanism to say: this market cannot sustain three competitors, so consolidation is preferable to sequential failure.
If the Commission blocks the merger and one operator subsequently exits under cost pressure – rising DoC concession fees, weather disruption, compliance costs – the market becomes a monopoly anyway. An unplanned monopoly, with no conditions attached, no regulatory oversight of pricing, and no structural protections for consumers. A cleared merger could at least carry behavioural undertakings.
The Wairoa River is only open for commercial rafting 26 days a year. That single fact captures the absurdity of applying a framework designed for national markets to a seasonal activity on a regional waterway.
What regional businesses should take from this
The rafting case is a useful precedent for any regional operator contemplating consolidation with a local competitor. Two rural accountancy practices, two provincial freight companies, two adventure tourism operators – the legal test is identical regardless of scale. If the merged entity would dominate a narrowly defined market, the Commerce Act applies.
The five-month timeline and associated compliance costs are themselves a data point. For small operators already under financial pressure, the regulatory process is not free. It consumes management time, legal fees, and commercial uncertainty during a period when the businesses need to be operating, not waiting.
New Zealand’s competition framework was built for markets large enough to sustain rivalry. When it encounters markets that are not, it has no good answer – only a binary choice between blocking consolidation and permitting monopoly. The Rotorua rafting case will not resolve that tension. But it will make it harder to ignore.
Sources
- Rafting JV Co seeks clearance to acquire rafting and sledging assets (2025-11-13)
- Statement of Issues released for Rafting JV Co’s application (2026-02-05)
- Rafting JV Co – Case Register (2025-11-12)
- Rotorua rafting merger proposal: Market position key as Commerce Commission narrows focus
- Ex-post merger review report 2023/24 (2024-02-29)
- ‘Monopoly position’ key concern in proposed rafting business merger