Commerce Commission follows through with price-fixing suit against Wrightson, Elders, others
By Jonathan Underhill
Aug. 3 (BusinessDesk) - The Commerce Commission has filed court proceedings against PGG Wrightson, Elders New Zealand and five individuals it claims fixed fees charged during the introduction of a national livestock tagging scheme. The regulator is in discussions with a third company, Rural Livestock.
The commission alleges the companies and individuals breached the Commerce Act by establishing three pricing agreements prior to the NAIT Act coming into force in July 2012. The individuals involved are all current or former employees of Wrightson and Elders, it said in a statement. The proceedings filed in Auckland High Court on Friday allege the parties agreed to fix the price of tagging un-tagged cattle at sale yards, increase yard fee charges, and increase stock and station agent charges by introducing an administration fee for NAIT-related costs.
NAIT is an industry-based initiative which the government helped fund, requiring radio tags for cattle and deer and allowing nationwide tracing of livestock in a bid to bolster New Zealand's response to any biosecurity threats.
The lawsuit was flagged last month and Wrightson said at the time it had cooperated with the regulator's investigation and that the potential penalty, while significant, was unlikely to be “materially price-sensitive”.
Companies convicted of price-fixing can attract a maximum penalty that's the greater of $10 million, or three times the commercial gain, or if that can't be established easily, 10 percent of turnover.
Wrightson shares last traded at 46 cents.