Media Releases

Waste oil firm fined $425k for attempted anti-competitive behaviour

3 December 2015

Enviro Waste Services Limited has been fined $425,000 in the Auckland High Court following a Commerce Commission investigation into attempted anti-competitive conduct in relation to the collection of waste oil in the upper South Island.

The Commission’s investigation focused on the conduct of Bens Oil, a division of Enviro Waste based in Nelson, after its branch manager attempted to form an agreement with a competitor in September 2012 to reduce competition for existing customers in the waste oil collection market.

Branch manager Darrell Askew admitted his liability and was personally fined $5,000. Under the settlement that was agreed to resolve this case, Enviro Waste will also contribute a further $25,000 towards the Commission’s investigation costs.

The Commission investigated Mr Askew’s conduct after he approached competitor Transpacific Industries Group (TPI) about its efforts to get existing Bens Oil customers to switch to its service. TPI had begun offering to pay per litre collected, while Bens Oil’s policy was not to charge or pay for its service.

Mr Askew contacted TPI in September 2012 and attempted to strike an agreement for the two companies to compete less aggressively for each other’s existing customers. Mr Askew threatened that Bens Oil would enter the separate waste tallow collection market to compete with TPI if an agreement could not be reached.

While the attempt was made to enter into an anti-competitive agreement, it was not successful and Bens Oil did not make any commercial gain.

Commission Chair Dr Mark Berry said the Court-imposed penalties served as a strong reminder to businesses to avoid engaging in any discussions with competitors about pricing or market share.

“The Commission works hard to protect competition as it ultimately benefits consumers by driving lower prices, better services and greater innovation,” Dr Berry said.

“Attempting to strike an anti-competitive agreement is illegal, regardless of whether it is calculated or an ill-thought out reaction to competitive pressure. Businesses should avoid having any discussions with competitors about their pricing or business models to ensure they don’t put themselves at risk of breaching the Commerce Act.”

A copy of the High Court judgment is available on our website.

Background

Waste oil is the left-over lubricant oil generally used in petrol and diesel engines and hydraulics. When engine oil is changed it can be collected and recycled. Waste oil collection service providers refine waste oils into light fuel oil. The end product can then be sold as fuel for furnaces, boilers or some heating systems.