News

Domino's Pizza Australia buys NZ Pizza Haven, Aussie acquisition possible

February 6, 2005

Domino's Pizza Australia is acquiring all 35 Pizza Haven units in New Zealand.

According to published reports, the purchase, expected to be completed in March, will give Domino's a total of 51 New Zealand units, leaving it well on its way to its goal of 70 stores nationwide.

This is the third time in the last decade Domino's Australia has acquired a competitor. In 1995, it acquired Silvio's Dial-A-Pizza, and it scooped up Big Daddy's Pizza in 2004. Both were Australian companies.

Pizza Hut is the largest player in the New Zealand market, where it has approximately 100 outlets. In 2001, it made a significant move to dominate the pizza trade there when it bought 60 Eagle Boys Pizza units.

Pizza Haven franchisees have the option to convert their units to Domino's or finish their contracts as Pizza Haven operators.

Adelaide, Australia-based Pizza Haven has struggled to maintain its share in Australia, one of the world's most competitive pizza markets (read The Battle for Australia). Pressure from Pizza Hut, Domino's and Eagle Boys has resulted in ongoing Australian store closings over the last decade. There are about 135 Pizza Haven units in Australia.

The pizza price war in New Zealand was apparently even worse, according to a copy of an e-mail sent to franchisees by Pizza Haven owners, and obtained by PizzaMarketplace. The Christou family, which owns the firm, had little choice other than to sell the chain.

"Over the last 2 years the pizza competition in New Zealand has intensified to the point we as a company had began to consider the future of the business and the growth potential in the New Zealand market," the e-mail began. "We had two options either to expand our 35 store chain and compete with Pizza Huts (sic) 100 outlets or sell the business.

"After much deliberation and (a) failed attempt to master franchise the operation we have decided to sell the Pizza Haven New Zealand business to Dominos (sic) Pizza to avoid further escalation of a price war which is evident in the Wellington (New Zealand) region."

The e-mail also hinted at a possible sale of Pizza Haven's Australia units, though neither Domino's nor any other firm is named as a buyer.

"Today we are in a position to rationalize the business in Australia and we are currently considering various options," the e-mail read. "Our primary objective is to ensure our franchise network is well accommodated and any decision will be viewed in that spirit." Being free of its Australian units would allow Pizza Haven to focus on its first China unit, set to open in March.

According to a report in Australia's The Courier-Mail, Don Meij, chief executive of Domino's Pizza Australia, denied negotiations were underway to buy Pizza Haven's Aussie units.

Read updated stories from Down Under: Domino's swallows Pizza Haven.