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Commission To Monitor Pipfruit Industry

Commission To Monitor Pipfruit Industry To Ensure Competition Can Develop

Media Release 1999/88

The Commerce Commission will continue to monitor the pipfruit industry to ensure that competition can develop effectively should the Government go ahead with its proposed deregulation of the industry.

Commission Acting Chairman Mark Berry said that there has been widespread concern in the industry that the New Zealand Apple and Pear Marketing Board (ENZA) may be using its currently protected market power to prevent competition developing in the future.

"We have investigated ENZA's activities and not found evidence of a breach of the Commerce Act," Mr Berry said.

"We have closed this investigation and will instead monitor the industry to ensure ENZA does not hinder healthy competition developing in future."

The industry's main concerns, which it brought to the Commission, were that some contracts ENZA was entering or negotiating might have prevented a competitor gaining future access to fruit, packhouses and coolstores.

Mr Berry said that currently it has no evidence of contracts or other arrangements that would prevent growers supplying fruit to a new exporter after deregulation.

New competitors will be able to gain access to existing packhouses and coolstores. The extent of the contracts and arrangements between ENZA and the packhouses and coolstores is not considered to be anti-competitive at the current time. In addition, it appears to be economically viable to build new packhouses and coolstores if there is demand for them.

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Mr Berry stressed that the Commission has no role in determining whether the industry should, or should not, be deregulated-that is a decision for the Government to make. The Commission's role is to bring about compliance with the Commerce Act.

Previously the Commission has deliberately paid close attention to other industries that were moving towards deregulation and that had recently been deregulated.

"Deregulation is a major change for any industry," Mr Berry said. "It is important that all involved know what rights and obligations they have in their new environment."

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