Venkat Raman
Auckland, March 22, 2020
Traders who misuse the fear of Covid-19 spreading to increase prices of the goods they sell can come to grief as the New Zealand government moves to prevent such practices.
Commerce and Consumer Affairs Minister Kris Faafoi said that the government will not tolerate unscrupulous businesses using the coronavirus pandemic as an excuse to resort to price-fixing and such other anti-competitive practices.
He said that he has asked the Commerce Commission to take account of the exceptional circumstances created by COVID-19 when monitoring business behaviour in coming weeks.
“The purpose of my request to the Commerce Commission is to make sure businesses can work together in ways that will allow them to provide things like grocery products and other essential goods and services to New Zealanders in a fair and equitable way,” he said.
Mr Faafoi warned that the measure should not be seen as a licence for price gouging or hoarding. The Government and the public would take an extremely dim view of that, he said.
“The Government is aware that, as a result of COVID-19, sectors like supermarkets and telecommunications companies may need to work in a more collaborative way than the Commerce Commission would be normally comfortable. Now is not the time for strict competition rules to get in the way of common sense and legitimate collaboration responding to COVID-19,” Mr Faafoi said.
“I have faith that New Zealand’s supermarkets and other essential services, as well as New Zealand consumers, will act responsibly and with the best interests of their fellow New Zealanders in mind during these extraordinary times,” he added.
Mr Faafoi said that he has also requested the Commerce Commission to be more flexible around allowing businesses to work together, share resources, or take other cooperative measures to ensure New Zealanders have access to the products and services.
Following is a Statement issued by Commerce Commission Chairperson Anna Rawlings:
The Commission is aware that businesses are doing everything they can in extremely difficult circumstances to meet New Zealanders’ needs.
We do not want them to feel constrained by the Commerce Act in working together to do this.
The Commission has no intention of taking enforcement action under the Commerce Act against businesses who are cooperating to ensure New Zealanders continue to be supplied with essential goods and services during this unprecedented time.
If you need to work with your competitors to share staff or distribution networks or take other measures to ensure security of supply, you are able to do this.
However, the Commission will not tolerate unscrupulous businesses using COVID-19 as an excuse for non-essential collusion or anti-competitive behaviour. This includes sharing information on pricing or strategy where it isn’t necessary in the current situation.
The Commission will be issuing further guidance for businesses on its website in the coming days.
Indian Newslink has been receiving complaints against some businesses trading in essential commodities, biscuits and confectionery and other items saying that they have hike the price of many of these substantially. We request readers to write us with details. Our earlier report on the subject can be read here.
