Which markets are affected?

Part 4 of the Commerce Act applies to electricity networks, certain gas networks, and specific services in New Zealand’s three major international airports (Auckland, Wellington, and Christchurch).

The Electricity Authority is also responsible for promoting competition in the electricity industry including in generation and retail markets.

The Dairy Industry Restructuring Act 2001 (DIRA) was implemented to mitigate the risks to consumers from the formation of Fonterra, which resulted in a market share that is likely to give Fonterra significant market power in a number of domestic markets. Our main role under DIRA is to review Fonterra’s base milk price calculation each year, including a review of their milk price manual that sets out how they will calculate the base milk price.

The Fuel Industry Act 2020 sets up a regulatory regime for fuel with the purpose of promoting competition in engine fuel markets for the long-term benefit of consumers.

The Commission will be responsible for enforcing the requirements the Act places on fuel businesses. The Commission will also have the ability to analyse information disclosed under the Act in order to monitor the competitive performance of fuel markets.

The requirements of the Fuel Industry Act are expected to take effect in phases starting in August 2021.

The Government has indicated the Commerce Commission will be the economic regulator for water services under the Government's Local Water Done Well regime. We are currently awaiting the Local Government (Water Services) (LGWS) Bill that will implement the full regulatory system. Water Regulation is proposed to be added to Part 4 of the Commerce Act in mid-2025.

The Retail Payment System Act 2022 (the Act) enables us to monitor the retail payment system, and regulate designated retail payment networks, for the long-term benefit of New Zealand businesses and consumers who rely on it every day to buy and sell goods and services.

Visa and Mastercard networks have initially been categorised as ‘designated networks’ by the Act. Where a network is designated, this means the Commission has powers to:

• determine how prices can be set or expressed – an ‘initial pricing standard’ has already been set under the Act that limits ‘interchange fees’
• require greater transparency of certain information
• allow other participants to access aspects of the network.

We also have powers to issue merchant surcharging standards for any network to ensure surcharges for payment services such as credit cards or contactless payments reflect the actual cost of providing that payment option.

The Commission has responsibilities to monitor and regulate the grocery sector under the Grocery Industry Competition Act 2023. The Act is complemented by existing and new regulation under the Commerce Act and Fair Trading Act. Our work focuses on the following areas to improve competition in the grocery sector:

• creating pricing and promotional transparency for consumers
• establishing a new supply code of conduct to create a level playing field for all suppliers
• establishing a new wholesale regime that will make it easier for new entrants to enter the market and existing retailers to compete and innovate
• ongoing monitoring of the state of competition in the grocery sector and that will report on whether it is delivering benefits for New Zealanders over time
• taking action to address non-compliance where necessary.