Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

First Gas ordered to pay $3.4m for anti-competitive conduct

By Rebecca Howard

Feb. 22 (BusinessDesk) - First Gas has been ordered to pay $3.4 million by the High Court after admitting it engaged in anti-competitive conduct when acquiring the Bay of Plenty gas distribution assets of GasNet.

“The penalty handed down by the High Court reflects the seriousness of this conduct and is sufficient to ensure that First Gas will not profit from the acquisition," Commerce Commission chairman Mark Berry said in a statement

"It is also a reminder to businesses that anti-competitive acquisitions are a priority area for the commission and if there is any doubt about the competition effects of a merger, they should seek clearance from us first."

Earlier this year the commission began proceedings in the High Court related to the firm’s 2016 purchase of 9.5 kilometres of steel and plastic pipelines that Whanganui-based GasNet laid in a new subdivision in Papamoa. At the time, it said First Gas, which operates the country’s trunk transmission pipelines and is the third-largest gas distributor after Powerco and Vector, bought the assets without a clearance or authorisation from it.

According to Berry, First Gas adopted a "concerted strategy" designed to force GasNet to leave the Bay of Plenty in breach the Commerce Act. This strategy included taking steps to duplicate pipelines GasNet had laid in new property subdivisions.

“First Gas sent a clear message to its competitor that its Bay of Plenty investment was under threat. GasNet’s shareholder decided its best course of action was to sell the business and agree to a restraint of trade that would prevent it from returning. This resulted in a long-term structural change in the market, removing competition between First Gas and GasNet for new development contracts,” Berry said.



In a separate statement, First Gas said it accepts the High Court’s ruling for costs relating to an acquisition the Commerce Commission said was likely to reduce competition.

"We made an error by not seeking Commerce Commission approval in the purchase of another gas infrastructure provider – it was an expensive oversight that could have prevented any breach of competition laws," it said.

The company said that, at the time it had believed the transaction complied with the relevant regulations "but now accepts it had not fully considered the possible impact on other developers laying gas distribution networks, and it should have sought clarification from the commission."

First Gas owns and operates more than 2,500 kms of high-pressure gas transmission pipes and about 4,800 kms of gas distribution pipes in the North Island.


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Tax Bill Passes, Drops: “An End To Unnecessary Secondary Tax”

“The changes mean Inland Revenue will more closely monitor the tax paid by wage and salary earners through the year. If it appears the worker is being over taxed, Inland Revenue will suggest a more suitable PAYE tax code tailored to that worker.” More>>

ALSO:

Ethiopian Airline Crash: Boeing 737 Max Aircraft Operations Temporarily Suspended

New Zealand’s Civil Aviation Authority has suspended the operation of Boeing 737 MAX aircraft to or from New Zealand. Currently this affects only one operator, Fiji Airways. There are no other airlines that fly this aircraft type to New Zealand. More>>

ALSO:

Sorting Out DNA: Crime-Busting Software Wins Top Science Prize

Software developed in New Zealand that has contributed to identifying suspects in tens of thousands of criminal cases around the world has won the 2018 Prime Minister’s $500,000 Science Prize. More>>

ALSO:

In The High Court: IRD Wins Tax Avoidance Case

Inland Revenue has won a High Court case against Eric Watson’s Cullen Group over a nearly $52 million tax debt. More>>

ALSO:

Insurers Withdraw From Market: Plea For EQC Rethink

A consumer watchdog wants the government to rethink the Earthquake Commission (EQC) as more people are pushed out of getting property and contents insurance. More>>

ALSO:

Women's Day: New Zealand Rated Third Best In OECD For Working Women

New Zealand has been rated among the top countries in the world for working women. The Women in Work Index rated New Zealand third in the OECD and it was the only country outside Europe to make the top 10. More>>

ALSO: