Commerce Commission receives authorisation application from Kotahi Logistics

Kotahi Logistics has applied to the Commerce Commission seeking authorisation under Section 58 of the Commerce Act for an agreement that may be anti-competitive. Kotahi is a partnership between Fonterra Co-operative Group Ltd and Silver Fern Farms Ltd.

Under the agreement, Kotahi would coordinate domestic and international freight services. The freight services would initially be for Fonterra and Silver Fern Farms with other importers and exporters being invited to become partners and customers in the future.

The Commission may grant authorisation for certain agreements that may otherwise breach the Commerce Act 1986 if it is satisfied that the public benefits of the agreements outweigh the detriments arising from the loss of competition.

The Commission will release further information on its process, timetable, and the likely competition issues once it has had an opportunity to consider the application.

Anyone who has an interest in this matter and who wants to make a submission can contact the Commission at registrar@comcom.govt.nz with the reference Kotahi in the subject line of the email.

A public version of the application will shortly be available on the Commission’s website under Business Competition >Authorisations register.

Background

The Commission may grant authorisations with respect to practices considered to be in breach of the restrictive trade practice provisions (except sections 36 and 36a which involve taking advantage of market power in New Zealand and/or Australian markets) if it is satisfied that the public benefits of the practice outweigh the detriments arising from the loss of competition.

A business can apply to the Commission for an authorisation, and the Commerce Act sets out the procedures for such applications.

The granting of a restrictive trade practice (market behaviour) authorisation protects the applicant from court action under the Commerce Act by the Commission and private individuals.