Three oil companies charged with price fixing
4 September 1997
The Commerce Commission has started court action against Caltex (NZ) Ltd, Mobil Oil New Zealand Ltd, and Shell New Zealand Ltd, alleging that they breached the Commerce Act by agreeing to remove a discount off the price of fuel at more than 50 stations in Auckland.
Commission Chairman Dr Alan Bollard said that the Commission filed a statement of claim in the Auckland High Court yesterday, and the three defendants have now been served with legal documents.
The Commission alleges that Caltex, Mobil and Shell had an arrangement or understanding to withdraw the offer of a free car wash for customers spending $20 or more on fuel. The free offer was, in effect, a discount off the price of petrol.
The companies withdrew the offer within days of each other at the beginning of June 1996.
Dr Bollard said that in an industry where the level of price competition is low, it is of great concern if some or all of the parties agree on promotional offers or discounts.
The Commerce Act prohibits competitors colluding to fix prices. This includes collusion over discounts. This does not have to be a formal contract - informal arrangements or understandings are also prohibited.
The Commission has not included BP in its court action. BP removed free car wash offers some time after the other oil companies, and the Commission has no evidence that it was party to the alleged arrangement or understanding.
Recent action taken by the Commission against price fixing includes court cases against two bakery chains, eight Auckland Toyota dealers and 12 North Island meat companies. Courts imposed penalties of $150,000 against each bakery chain and $50,000 against each of seven of the Toyota dealers. Court action is continuing against the eighth dealer and against the meat companies.
Media contact: Commerce Act Manager Jo Bransgrove
Phone work (04) 498 0958, home (04) 475 9000
Communications Officer Vincent Cholewa
Phone work (04) 498 0920, home (04) 479 1432