Latest news with #Gilmours
1News
5 days ago
- Business
- 1News
Proceedings filed against major grocers for alleged cartel conduct
The Commerce Commission will be filing legal proceedings against Foodstuffs North Island and Gilmours over allegations of cartel conduct. The Commission said it would "shortly" file civil proceedings against the two companies for alleged breaches of the Commerce Act and the Grocery Industry Competition Act. Gilmours is owned by Foodstuffs North Island. Foodstuffs North Island has denied any unlawful conduct. It followed an investigation by the Commission into agreements the companies entered with a national grocery supplier regarding the supply of products to a hospitality customer. The supplier and customer both had "considerable volumes of business" with Foodstuffs North Island and Gilmours. ADVERTISEMENT "When FSNI/Gilmours discovered the supplier and customer had established a direct trading relationship, they persuaded the supplier to re-route that business through them," the Commerce Commission said. Commerce Commission chairman Dr John Small said the Commission believed the companies had engaged in cartel conduct and breached the Commerce Act. Cartel conduct is when two or more businesses agree not to compete with each other. This could include price fixing, allocating customers, rigging bids or restricting the output of goods and services. 'We take allegations of cartel conduct very seriously. Cartel conduct harms consumers through higher prices or reduced quality, and it harms other businesses that are trying to compete fairly,' Small said. 'In this instance, the supplier wanted to provide a competitive supply channel, but this was stopped by the agreement with FSNI and Gilmours. 'We do not tolerate this kind of behaviour and will not hesitate to take court action, where appropriate." The morning's headlines in 90 seconds, including Trump's deadline for Russia, legal action against a supermarket giant, and an unusual marathon record. (Source: Breakfast) ADVERTISEMENT The commission also believed the companies obstructed the supplier's ability to sell groceries to the customer in question and did not deal with the supplier in good faith, which breached GICA. 'The Grocery Supply Code was introduced to address the power imbalance between the major supermarkets and their suppliers,' Grocery Commissioner Pierre van Heerden said. 'The major supermarkets are the largest customers for most grocery suppliers. This creates a reluctance for suppliers to call out bad behaviour or push back on the supermarkets for fear of damaging relationships or losing access to supermarket shelves. 'The Commission is acutely aware of the risk suppliers may face coming forward and has ways to protect their identity and business. We have anonymous reporting tools for cartels and GICA and encourage anyone concerned to use these ways of contacting us." Following the Commission's statement this morning, a Foodstuffs North Island spokesperson said: "Foodstuffs North Island and our stores are committed to complying with all our regulatory obligations, and we co-operated fully with the Commerce Commission throughout their investigation of this matter." The business "strongly" denied any unlawful conduct. "As this matter will be before the Court in due course, it would not be appropriate to comment further at this time.' ADVERTISEMENT Foodstuffs North Island was issued a warning earlier this month for the treatment of a supplier that likely breached the Grocery Industry Competition Act 2023.
RNZ News
5 days ago
- Business
- RNZ News
Nicola Willis is encouraged Commerce Commission has taken Foodstuffs North Island to court
Nicola Willis. Photo: RNZ/Mark Papalii Finance and Economic Growth Minister Nicola Willis is encouraged the Commerce Commission has taken a case against grocery giants for alleged cartel behaviour . The commission is taking Foodstuffs North Island and its subsidiary Gilmours Wholesale to court over what it believes is cartel conduct. The regulator said it would shortly file civil proceedings against the big grocery suppliers under the Commerce Act and Grocery Industry Competition Act (GICA). It said the parties set up a supply agreement with a hospitality customer that effectively blocked competition by another supplier. Willis said the case was for the courts to determine, as pre-judging the matter would be mixing her role as minister responsible for grocery regulation. But she said it was important the commission uses its prosecution powers when evidence is brought to it. "I hope that this does send a signal to those who feel like they have been mistreated that where appropriate the Commerce Commission is prepared to take serious action," she said. Willis said New Zealand had laws against cartel-like behaviour for good reason. "New Zealand consumers ultimately end up paying the price for misconduct. Cartels are not allowed in New Zealand," she said. "They can be very hard to prove. In this case, what is encouraging is that affected parties have come forward, have provided that information to the commission, with the confidence it'll be taken seriously, and the Commerce Commission has progressed to a prosecution." Prime Minister Christopher Luxon said it was "fantastic" an investigation was underway. "We don't want to see that in New Zealand, I'm proud they're doing that work. It's exactly the issue that we're raising, we want competition in the supermarket sector, there's no excuses for any of that behaviour whatsoever." Prime Minister Christopher Luxon said it was "fantastic" an investigation was underway. Photo: RNZ / Samuel Rillstone Labour leader Chris Hipkins called the allegations "really concerning" and said it showed why more competition was needed in the grocery sector. "I think it's well and truly time we saw more competition in that sector. I'm open to any conversations about how we get more competition in that area." The government has promised to reveal the next steps to improve supermarket competition, as part of its latest quarterly action plan. ACT leader David Seymour, while unable to comment on the substance of the commission's case as it was before the courts, also pointed to the lack of competition in the sector. "Until we address the competition problem we won't see lower prices, no matter how many different commissioners there are watching over the sector," he said. Over the weekend, ACT announced a policy to introduce a fast-track approval process for new entrants or smaller grocers, streamlining rezoning, consenting, and investment approvals. Commerce Commission chair John Small said the commission took allegations of cartel conduct seriously. "Cartel conduct harms consumers through higher prices or reduced quality, and it harms other businesses that are trying to compete fairly," Small said. "In this instance, the supplier wanted to provide a competitive supply channel, but this was stopped by the agreement with FSNI and Gilmours. "We do not tolerate this kind of behaviour and will not hesitate to take court action, where appropriate." In a statement, Foodstuffs North Island denied wrongdoing. "Foodstuffs North Island and our stores are committed to complying with all our regulatory obligations, and we co-operated fully with the Commerce Commission throughout their investigation of this matter," a spokesperson said. "We strongly deny any unlawful conduct. "As this matter will be before the court in due course, it would not be appropriate to comment further at this time." Additional reporting by RNZ Business Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Scoop
5 days ago
- Business
- Scoop
Commerce Commission To File Proceedings Against Foodstuffs North Island And Gilmours, Alleging Cartel Conduct
The Commerce Commission will shortly file civil proceedings against Foodstuffs North Island Limited (FSNI) and Gilmours Wholesale Limited (Gilmours) for alleged cartel conduct (market allocation) in breach of the Commerce Act, and alleged breaches of the Grocery Industry Competition Act (GICA). The Commission investigated agreements that FSNI and Gilmours entered into with a national grocery supplier regarding the supply of products to a hospitality customer. The supplier and the customer both have considerable volumes of business with FSNI/Gilmours. When FSNI/Gilmours discovered the supplier and customer had established a direct trading relationship, they persuaded the supplier to re-route that business through them. Commerce Commission Chair, Dr John Small, says the Commission believes FSNI and Gilmours engaged in cartel conduct which is a breach of section 30 of the Commerce Act. 'We take allegations of cartel conduct very seriously. Cartel conduct harms consumers through higher prices or reduced quality, and it harms other businesses that are trying to compete fairly,' Dr Small says. 'In this instance, the supplier wanted to provide a competitive supply channel, but this was stopped by the agreement with FSNI and Gilmours. 'We do not tolerate this kind of behaviour and will not hesitate to take court action, where appropriate,' Dr Small says. The Commission is also filing proceedings against FSNI and Gilmours under GICA. The Commission believes FSNI and Gilmours obstructed the supplier's ability to sell groceries to the customer in question, and did not deal with the supplier in good faith. Grocery Commissioner, Pierre van Heerden, says this behaviour could be in breach of the Grocery Supply Code. 'The Grocery Supply Code was introduced to address the power imbalance between the major supermarkets and their suppliers,' Mr van Heerden says. 'The major supermarkets are the largest customers for most grocery suppliers. This creates a reluctance for suppliers to call out bad behaviour or push back on the supermarkets for fear of damaging relationships or losing access to supermarket shelves. 'The Commission is acutely aware of the risk suppliers may face coming forward and has ways to protect their identity and business. We have anonymous reporting tools for cartels and GICA and encourage anyone concerned to use these ways of contacting us,' Mr van Heerden says. As this matter will soon be before the Court, the Commission will not be providing further comment on the case at this time. Background Cartel conduct A cartel is where two or more businesses agree not to compete with each other. Cartel conduct can take many forms, including price fixing, allocating customers, rigging bids or restricting the output of goods and services. Because cartels can harm the interests of consumers - goods and services become more expensive, consumers end up with fewer choices, and quality and service levels are likely to deteriorate – tackling cartels is one of the Commission's key enforcement priorities. Grocery Supply Code New Zealand's mandatory Grocery Supply Code was introduced under the Grocery Industry Competition Act 2023. The Supply Code was created to increase transparency and certainty for suppliers through a set of rules supermarkets need to follow when dealing with suppliers. Bringing increased certainty to agreements between supermarkets and suppliers is intended to give suppliers more confidence to innovate and invest in more choice for consumers.
RNZ News
5 days ago
- Business
- RNZ News
Commerce Commission takes Foodstuffs North Island to court over alleged 'cartel conduct'
The Commerce Commission said the supermarket chain did not deal with the supplier in good faith. Photo: 123RF The Commerce Commission is taking Foodstuffs North Island and its subsidiary Gilmours Wholesale to court over what it believes is cartel conduct. The regulator said it would shortly file civil proceedings against the big grocery suppliers under the Commerce Act and Grocery Industry Competition Act (GICA). The regulator said the parties set up a supply agreement with a hospitality customer that effectively blocked competition by another supplier. Commission chair John Small said the commission took allegations of cartel conduct seriously. "Cartel conduct harms consumers through higher prices or reduced quality, and it harms other businesses that are trying to compete fairly," Small said. "In this instance, the supplier wanted to provide a competitive supply channel, but this was stopped by the agreement with FSNI and Gilmours. "We do not tolerate this kind of behaviour and will not hesitate to take court action, where appropriate." In addition, the commission said the parties did not deal with the supplier in good faith. Grocery commissioner Pierre van Heerden said that behaviour could be in breach of the Grocery Supply Code. "The Grocery Supply Code was introduced to address the power imbalance between the major supermarkets and their suppliers," van Heerden said. "The major supermarkets are the largest customers for most grocery suppliers. This creates a reluctance for suppliers to call out bad behaviour or push back on the supermarkets for fear of damaging relationships or losing access to supermarket shelves. "The Commission is acutely aware of the risk suppliers may face coming forward and has ways to protect their identity and business. "We have anonymous reporting tools for cartels and GICA and encourage anyone concerned to use these ways of contacting us." The commission said it would not be providing further comment on the case at this time, as the matter was before the court. Foodstuffs North Island has been asked for comment. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
