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Andrew Bayly: Commerce and Consumer Affairs Minister on the Government's planned crackdown on mergers · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks. There'd be
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  Speaker 2: So the government is looking to crack down on business mergers,
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  Speaker 2: Commerce and Consumer Affairs. Minister Andrew Bailey has announced a
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  Speaker 2: review of New Zealand's laws on competition. He wants to
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  Speaker 2: try and prevent monopolies forming you know, winners losers, and
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  Speaker 2: the winners eat the losers and then before you know it,
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  Speaker 2: they become a monopoly. He reckons doing that will improve productivity.
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  Speaker 2: So Andrew Bailey joins you right now, good evening to
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  Speaker 2: your minister.
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  Speaker 3: Good evening, Andrew.
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  Speaker 2: So why are you doing this.
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  Speaker 3: Well, we haven't done it for twenty years. There hasn't
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  Speaker 3: not been a formal review for twenty years, and we
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  Speaker 3: need to make sure that we keep pace for our
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  Speaker 3: international partners. Australias and the process of updating their competition
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  Speaker 3: laws and many other jurisdictions around the world have done
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  Speaker 3: the similar thing. But ultimately what we're looking at New
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  Speaker 3: Zealanders we want to make sure that our laws are
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  Speaker 3: fit for purpose when it comes to assessing mergers and acquisitions.
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  Speaker 3: And I think it's fair to say that We've got
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  Speaker 3: a number of industries where we've got a small number
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  Speaker 3: of players who've got very significant market shairs, and it
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  Speaker 3: means less innovation happening, and news enterder is paying more
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  Speaker 3: than they ought to.
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  Speaker 2: So you don't mind small companies merging, is when bigger
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  Speaker 2: the companies merging, you get closer and closer to a monopoly.
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  Speaker 3: Yeah. No, this is a tension point. We want to
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  Speaker 3: encourage competition and obviously economies of scale. When companies buy
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  Speaker 3: the companies and grow, that's fine, but there comes a
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  Speaker 3: point when those entities become very substantial. And we have
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  Speaker 3: had instances in the past where we've allowed mergers to
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  Speaker 3: occur that have result in poor outcomes. And given a
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  Speaker 3: specific example, I think historically people would look back on
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  Speaker 3: the merger of Progressive when they brought food Stuffs, which
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  Speaker 3: ended up with only two supermarket operators a news center
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  Speaker 3: of large scales, that that was probably a poor decision
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  Speaker 3: in hindsight. But Commence commissioners working under the rules that
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  Speaker 3: they had in place at that time, and what we're
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  Speaker 3: suggesting now is we need to review that and make
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  Speaker 3: sure that we don't allow mergers that in hindsight we're
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  Speaker 3: going to look back and say, God, we should have
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  Speaker 3: stopped that.
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  Speaker 2: Ye say no, but you know we're supposed to let
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  Speaker 2: the free market do that, do its thing. That's what
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  Speaker 2: we did. That's what Roger Douglas sports in. I can't imagine,
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  Speaker 2: in fact act being very happy about this.
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  Speaker 3: Oh no, So it's fine. It's not precluding mergers, but
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  Speaker 3: there comes a point when if a certain industries where
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  Speaker 3: they're dominated by a few smaller players ultimately lead to
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  Speaker 3: outcomes where you can't get access to innovative services or
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  Speaker 3: let's say even banking. Right, I'm pursuing it and trying
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  Speaker 3: to encourage open banking, which means FinTechs come and operate
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  Speaker 3: and offer alternative banking products. That's the type of outcome
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  Speaker 3: we want to make sure that occurs. But we're doing
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  Speaker 3: that because we're in a situation where we've got not
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  Speaker 3: enough competition in the banking set. What we're trying to
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  Speaker 3: do is head that off for the past by these changes,
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  Speaker 3: by looking at introducing and giving the Commis Commission greater
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  Speaker 3: flexibility to assess mergers when they get to a point
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  Speaker 3: where potentially they could exert overt and overbearing market power
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  Speaker 3: on how that operates.
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  Speaker 2: And while we've got to hear there's some new research
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  Speaker 2: out from RFI Global that says that some retailers are
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  Speaker 2: charging customers to use their credit card and the retailers
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  Speaker 2: are pocketing it. And how's your feedcap idea coming along?
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  Speaker 3: We're the Comments Commissioner is doing a lot of work
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  Speaker 3: on a moment and I'm keen to make an announcement,
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  Speaker 3: but yes, we want to make sure that New Zealanders
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  Speaker 3: are not paying more than they ought to when they
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  Speaker 3: go to buy their coffee and getting charged at the church.
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  Speaker 2: Yes, thank you very much, Andrew Bailey, all the best,
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  Speaker 2: Thank you, Commerce and Consumer Affairs Ministered.
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