Hon Jim Anderton
Deputy Prime Minister

14 May 2000

News release

And now for Telecom and the petrol companies…

Alliance leader and Deputy Prime Minister Jim Anderton has Telecom and petrol companies in his sights following a landmark court decision.

The High Court has found that Carter Holt breached the Commerce Act by using its market dominance to prevent a Nelson-based company from competing with it.

The Court found that Carter Holt priced insulation products at below cost in Nelson, where it was losing market share to a product marketed by New Wool Products.

The Commerce Commission is studying the application of the decision to other industries.

Jim Anderton will be looking for a quick response from his officials on how the decision can be used to get lower prices for consumers in other sectors, including telephones and petrol.

"The best result for everyone would be for Telecom and the petrol companies to view this case as a warning. They should start providing the same lower price all over New Zealand, and not just in those corners where they face some real competition.

"Telecom has never adequately explained why it can provide phone packages cheaper in Wellington, where it competes against Saturn, than it charges in those parts where it doesn't face residential competition. Either Telecom is over-charging in the rest of the country, or it is predatory pricing against Saturn.

"Petrol companies have never explained why petrol is six cents a litre cheaper in places like Tauranga than it is in places where the big companies don't face competition from one tiny competitor."

Carter Holt was prosecuted under section 36 of the Commerce Act. The Government announced in April its intention to strengthen the section.

ENDS

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