GOVT BILL TIGHTENS MONOPOLY AND TAKE-OVER CONTROL

Press, Volume CXV, Issue 33933, 28 August 1975, Page 1

GOVT BILL TIGHTENS MONOPOLY AND TAKE-OVER CONTROL

(N.Z Press Association.'

WELLINGTON. August 27. The Government’s plans to deal with monopolies, mergers, and take-overs are spelt out in the Commerce Bill, introduced into Parliament today.

The focal structure for examining these elements of business would be a commerce commission and an examiner of commercial practices who could act as an agent of the Minister of Trade and Industry in investigating company activity.

The four-man commission could be extended by special appointment, and would have powers to inspect, examine, and audit company books and to require companies to provide documents for investigation.

The legislation is similar to that introduced in the 1974 Commerce BiH, which the Government subsequently dropped. But it makes provision for parties with a direct interest to be given 28 days notice of a monopoly inquiry. On, or before, the first day of inquiry the parties could

make written representations to the. Minister of Trade and Industry, and no reference to the contents of these, or to any consultations with him, could be made at the commission’s inquiry. When the report of the commission had been given, the Minister, after allowing time for appeals to be heard, could take action to break up the monopoly or oligopoly (a small group of suppliers).

Appeal authority Decisions of the commission could be referred to an appeal authority.

The Minister would be required to give a month’s notice of his intentions, and the people or companies concerned could use the period to propose changes for remedying the situation. The Minister could accept these proposals and decline to act on the commission’s recommendations, but details of the proposals and his acceptance of them would be set out in the Gazette. Seven sectors In seven sectors of industry, companies would have to get the approval of the Minister of Industries and Commerce for the take-over of other companies in their type of business. The companies would notify the examiner of commercial practices of any moves they make to acquire a shareholding of 51 per cent or more. Brewery and fruit and vegetable canning companies would be required to notify the examiner of any such moves within, or outside, their particular industry. Publishers of daily and Sunday newspapers would be required to inform him of any move to acquire a printing or publishing business. Paint and wallpaper manufacturers would report moves to get majority holdings in other

similar companies, or paint and wallpaper wholesalers. Transport companies, but not freight forwarders, would give such notification if they were engaged in aggregation activities embracing similar companies if the value of the assets of the two companies were $500,000, or more.

Flour millers and bakers would have to give such notice of take-over or merger proposals involving others in the industry if the value of the assets of the two companies exceeded s2m. Other aggregation proposals involving assets of more than ssm would be notified to the examiner. Similar action would be required in cases where just two participants were involved and the assets of the smaller was $250,000 or more. The examiner is charged under the bill with making a report to the Minister on whether the proposal would be contrary to the public interest.

The Minister could consent to the aggregation within 35 days, or if he did not like the proposal, refer it to the commerce commission. Within tw.o months of the commission’s report’s being received, or of an appeal’s being heard, he could refuse to permit the aggregation to take place. If a company involved in aggregation proposals came under the Overseas Investment Act, the Minister of Trade and Industry would have to consult the Minister of Finance before making a decision. Public interest The 133-clause bill defines a trade practice a trade practice as being contrary to the public interest as one which would increase costs of production, manufacture, transport, storage, or distribution of goods, or maintain costs at higher levels than w.ould be the case if the practice did not exist. It could be one which increased the selling price of goods, hindered or prevented a reduction in costs, increased the profits of manufacturers and traders, pre-

vented, reduced, or limited competition, limited or prevented the supply of goods to consumers, or reduced the variety available. The commerce commission could, however, excuse a breach of the definitions if it believed that the trade practice had benefits sufficient to outweigh other effects, or was not "unreasonable." (Opposition view, Page 14.)