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Settlement reached in equine air freight price fixing proceeding in New Zealand

Christian Fernsby ▼ | July 31, 2020
A settlement has been reached with the International Racehorse Transport New Zealand Partnership (IRT Partnership) in a price fixing case arising from an arrangement between IRT Partnership and its competitor for the provision of domestic and trans Tasman equine airfreight services.
International Racehorse Transport New Zealand Partnership
IRT   International Racehorse Transport New Zealand Partnership
The Commission filed proceedings seeking a pecuniary penalty against IRT Partnership in October 2019. However, it became clear that the impact of coronavirus on IRT Partnership’s business meant that it would not be able to pay any such penalty.

Topics: New Zealand

The Commission and IRT Partnership agreed to seek declarations from the Court that IRT Partnership breached the provisions of the Commerce Act.

The proceedings concerned a long standing joint venture arrangement between IRT Partnership and its competitor for the provision of domestic and trans Tasman equine airfreight services.

The joint venture arrangements offered benefits over time including the pooling of skills and resources for logistics.

However, the arrangements also included a profit sharing mechanism that controlled the prices charged to customers for equine airfreight services from October 2009. Those arrangements remained in place until October 2018.

Today, the High Court released its judgment granting the declarations sought by the Commission, recording that IRT Partnership’s conduct breached the Act.

“Collaboration between competitors can be pro competitive including by supporting more efficient delivery of goods and services to the benefit of consumers,” Commission Deputy Chair, Sue Begg said.

“However, that collaboration should not include unnecessary cartel provisions or extend to areas where the parties should continue to compete independently. In this case, it was not necessary for the joint venture to control the prices offered to customers."


 

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