Public Interest Objective Of New Trade Bill

Press, Volume XCVII, Issue 28552, 3 April 1958, Page 14

Public Interest Objective Of New Trade Bill

(New Zealand Press Association)

WELLINGTON. April 2. The protection of the public in-'.e-est will be the over-riding principle in the legislation to be intrcduced by the Government to p: event restrictive trade practices. The Minister of Industries and Commerce (Mr Holloway) said .tonight that good progress was being made with the legislation, and he expected it would be presented to Parliament when it met a. the end of June.

Mr Holloway said that in Its study of the problem of restrictive trade practices and ring price tenders, the Government had had the advantage of knowledge of the steps taken in the United Kingdom, the United States. Canada and Sweden. New Zealand was one of the last among the advanced countries to consider what action should be taken to protect the public interest in these questions. “The idea behind the legislation is to protect the interests of the consumer, and this has been the starting point in the preparation of our legislation as it has been in other countries.” he said In its election manifesto the Labour Government promised that legislative action would be taken to remove "restrictive trade practices and uncontrolled monopolies which maintain unfair and artificial prices, and sometimes del.berately restrict production.” The Government has the advantage of a detailed study of the complexities of unfair trade practices undertaken by the National Government. Definitions It is expected the legislation new being prepared will specify known types of unfair practices It will, in any event, contain a master clause which will allow an authority to be set up to con-

sice.- any cafe brought before it ar.d to initiate inquiries on 1U own account. Both the administration of the legislation and its interpretation will depend on definitions. It is understood, for example, that trouble has been experienced in defining just what is an "unfair practice.” Particular questions which are believed to be under study at the moment are:— (1) Restriction of membership by trade associations. <2> Failure to supply by making the supply of one article conditional on acceptance of another article. <3> Restricted distribution or limited outlets. It is not likely the legislation will deal specifically, tor example, with practices which are alleged to exist in the motor car retail business whereby the sale of a new vehicle is conditional on the trading in of a vehicle below its market value. The official view appears to be. first, that the major franchise holders do not condone this practice, and second, that specific cases if they arise can be considered within the general provisions of the legislation. Ring price tenders insofar as they originate within New Zealand will be dealt with in .he one piece of legislation. Any attempt to control ring nrice tenders originating from abroad —for example, identical quotes for copper wire—falls outside the scope of the legislation. Tenders from Abroad The Government cannot control prices submitted from abroad and the present thinking appears to be that the best answer to this monopolistic practice would be to award the tender to a firm outside

the ring even if this meant, lor example, the allocation of a tender to Japan rather than the United Kingdom. According to this line of thought, tenders should ce solicited from outsiders if necessary. There is a definite opinion ■ within Government circles that ring price tenders stultify competition and that they must be countered by all means available. Those which originate within New Zealand will definitely come within the scope of the new legislation. It is not expected that the new legislation will take a rigid line on the question of restrictive trade practices. Rather is the legislation expected to reflect prevailing Government opinion that the practice, whatever it may be should serve the public interest It is recognised that a restricted market, such as that existing m New Zealand, may justify trade practices which in a large economic area, such as the United States, would be bad. The Government view is that, at present, most of the various arrangements in New Zealand are made behind closed doors, often in the name of general welfare. If. in fact, these practices are *n the public interest then, in the Government’s view, people should be quite prepared to justify openly what they are doing. The intention is to find out actually what has been done and what has been happening. It is not likely that the legislation, when introduced, will result in the immediate application of sanctions against individuals or groups. Rather, it will set out what practices are frowned upon, and firms and organisations will be given time to bring their practice within the letter and spirit of the law.