International shipping companies servicing New Zealand should have to seek regulatory clearance to engage in price fixing and other anti-competitive arrangements, the Productivity Commission says.
Shipping companies are exempt from New Zealand competition law, leaving them free to fix prices in a way land-based firms would be prosecuted for attempting. The Productivity Commission's international freight transport services inquiry concludes such historic arrangements are increasingly under challenge since the European Union repealed such exemptions in 2008.
The commission "recommends that New Zealand require shipping companies wishing to collaborate to fix prices or limit capacity to demonstrate to the Commerce Commission that there will be a public benefit which will outweigh any anti-competitive effects," it said in the report released today.
Read more about the report here.
International freight costs for New Zealand amounted to $5 billion in 2010, or 2.7 per cent of gross domestic product. More than 80 per cent of New Zealand's trade with the rest of the world is by sea.