Competition & regulation
The focus of all our work is to improve the wellbeing of Aotearoa – its environment, its people, its culture, and its economy.
Sometimes this includes addressing national issues, such as the lack of competition in the grocery sector or the excessive profiteering in the banking sector, because these problems are causing real and measurable harm across the country.
We’ve been contributing to the national debates around how markets should function and whether competition is really delivering what we require as a nation.
Download our case studies as PDFs below.
We’re strong believers in the need for effective legislation and even-handed regulation to ensure we have a fair and well-functioning economy.
Markets work best with robust rules, and much harm to individuals and communities occurs when markets aren’t working properly. We’ve seen this in the supermarket sector, the banking sector, the electricity sector and others – and in every case, the result has been excessive profiteering at the expense of whānau, sometimes to the almost exclusive benefit of offshore shareholders.
And the causes of this unfair profiteering are obvious – there’s been too much consolidation, too much vertical integration, and too little enforcement of the rules in the Commerce Act. These are legislative and regulatory failures that are costing us all dearly.
So we’ve been making submissions on major mergers and acquisitions that we think are crucial to Aotearoa – and you can see some recent examples of our work below. We’re also active contributors to the market study into personal banking being conducted by the Commerce Commission. Some of this work is for clients, and much of the work is driven by the knowledge that the wellbeing of the communities we work with can only be improved when these structural problems are addressed.
All our work is informed by our inclusive and holistic approach to wellbeing and economics. We use robust analytical approaches, solid economic theory and a strong knowledge of the real-world implications of markets to develop well-informed and articulate regulatory submissions.
So, if you need our broad-based approach to competition issues, get in touch.
Submission on the proposed Foodstuffs merger (Feb 2024)
Foodstuffs – one of the duopolists in the supermarket sector – proposes merging its North Island and South Island cooperatives to achieve internal efficiencies.
There’s little indication this will produce better outcomes for consumers, and it’s probably not in our national interest for the merger to go ahead. However, the Commerce Commission may find itself in a difficult position, because the test it uses to assess the impacts – whether it will lessen competition – makes no sense when there’s negligible effective competition between the supermarkets.
We propose a range of options about how this can be addressed, but we’re sceptical that the Commerce Commission will take the braver courses of action – which may result in the merger being approved.
Submission on the proposed NZ Post acquisition of PBT Couriers (Jan 2024)
NZ Post is a State Owned Enterprise and one of a small handful of large courier companies, and is proposing to acquire PBT Couriers, which is a mid-sized competitor.
But we think the initial competition analysis mis-characterises the nature of the courier market – it’s not defined by the number of courier vans or warehouses, but by the network effects and cost efficiencies achieved by efficiently routing millions of parcels.
So the real value of the transaction lies in NZ Post acquiring the knowledge and skills and intellectual property of PBT, not its courier drivers. And if the transaction is allowed to proceed, it will likely create higher barriers to entry for other courier companies to grow in scale, further entrenching the position of the major players and risking the formation of an oligopoly in the courier market.
Submission on the Commerce Commission’s market study into personal banking (Nov 2023)
The Commerce Commission is conducting a market study into personal banking services, but we think the study is poorly designed and exclusionary.
It limits itself to a small subset of banking services, excludes the hundreds of thousands of businesses being impacted by the lack of competition, and doesn’t look deeply enough into the manifestly excessive profiteering of the Australian-owned banks.
The engagement approach of the Commission – of really only talking to banking insiders – is going to strongly prejudice the study against the very consumers being harmed by the actions of the Australian banks, and the study badly needs a reset.