Commerce Bill seen as risk under C.E.R.

Press, 5 December 1985, Page 34

Commerce Bill seen as risk under C.E.R.

PA Wellington The Government’s Commerce Bill could hamstring some New Zealand firms competing with Australian companies, says the Deputy Leader of the Opposition, Mr Bolger. Speaking in Parliament during the reporting back of the bill, Mr Bolger said the Opposition would not oppose the measure but would highlight its shortcomings. The wording of certain clauses was still open to wide interpretation, he said. The clause concerning dominance in a market — the pivotal clause of the bill — was still potentially damaging to New Zealand industry.

“If we insist that we have businesses in this country that must confine their dominande in the market as measured by only the New Zealand market, then given the broad sweep of change that is following C.E.R., they could be too weak to withstand the competition that will certainly come in across the Tasman.

“New Zealand firms could be hamstrung in having the size, strength and marketing expertise to compete with those firms in a similar industry from" a much larger economy across the Tasman.”

Mr Bolger said some firms in . New Zealand had dominance in the marketplace, but used that dominance constructively. Moving the report back, the chairman of the Commerce and Marketing Select Committee, Mr Peter Neilson (Lab., Miramar), said a number of changes had been made to the bill.

Ninety-five submissions were received on the bill, which was aimed at setting standards of market behaviour that would encourage competition,-he said.

The main elements of the bill as originally before the House had been retained. Among the amendments was a recasting of the clause relating to use of a

dominant position in a market, a measure which had attracted substantial comment.

Mr Neilson said that through the rewording of the clause, it must now be established that a person not only had a dominant position, but also used the power of that position to deter competition. “A purpose of deterring competition must now be established as a substantial purpose.” Mr Neilson said also that the reporting threshold for merger transactions had been increased from $5O million to sloo' million. The bill was reported back and set down for a second reading.