1 00:00:00,240 --> 00:00:03,840 Speaker 1: So the government is looking to crack down on business mergers. 2 00:00:04,720 --> 00:00:07,440 Speaker 1: Commerce and Consumer Affairs Minister Andrew Bailey has announced a 3 00:00:07,480 --> 00:00:11,040 Speaker 1: review of New Zealand's laws on competition. He wants to 4 00:00:11,039 --> 00:00:14,960 Speaker 1: try and prevent monopolies forming winners losers and the winners 5 00:00:15,000 --> 00:00:17,080 Speaker 1: eat the losers and then before you know it, they 6 00:00:17,160 --> 00:00:20,560 Speaker 1: become a monopoly. He reckons doing that will improve productivity. 7 00:00:20,560 --> 00:00:22,599 Speaker 1: So Andrew Bailey joins you right now, good evening to 8 00:00:22,680 --> 00:00:23,160 Speaker 1: your minister. 9 00:00:23,640 --> 00:00:24,640 Speaker 2: Good evening, Andrew. 10 00:00:24,960 --> 00:00:28,560 Speaker 1: So why are you doing this, Well, we haven't. 11 00:00:28,360 --> 00:00:31,040 Speaker 2: Done it for twenty years. There hasn't not been a 12 00:00:31,320 --> 00:00:34,080 Speaker 2: formal review for twenty years, and we need to make 13 00:00:34,120 --> 00:00:37,560 Speaker 2: sure that we keep pace for our international partners. Australias 14 00:00:37,960 --> 00:00:41,240 Speaker 2: and the process of updating their competition laws and many 15 00:00:41,280 --> 00:00:44,880 Speaker 2: other jurisdictions around the world have done the similar thing. 16 00:00:45,200 --> 00:00:47,559 Speaker 2: But ultimately what we're looking at the New Zealanders we 17 00:00:47,600 --> 00:00:50,400 Speaker 2: want to make sure that our laws are fit for 18 00:00:50,520 --> 00:00:53,519 Speaker 2: purpose when it comes to assessing mergers and acquisitions. And 19 00:00:53,600 --> 00:00:56,120 Speaker 2: I think it's fair to say that we've got a 20 00:00:56,200 --> 00:00:59,000 Speaker 2: number of industries where we've got a small number of 21 00:00:59,120 --> 00:01:02,160 Speaker 2: players who've got very significant market shairs and it means 22 00:01:02,480 --> 00:01:06,440 Speaker 2: less innovation happening, and news enters paying more than they 23 00:01:06,440 --> 00:01:06,920 Speaker 2: ought to. 24 00:01:07,040 --> 00:01:09,360 Speaker 1: So you don't mind small companies merging. Is when bigger 25 00:01:09,400 --> 00:01:11,160 Speaker 1: the companies merging and you get closer and closer to 26 00:01:11,200 --> 00:01:11,800 Speaker 1: a monopoly. 27 00:01:12,920 --> 00:01:15,480 Speaker 2: Yeah. No, this is a tension point. We want to 28 00:01:15,560 --> 00:01:19,800 Speaker 2: encourage competition and obviously economies of scale. When companies buy 29 00:01:20,440 --> 00:01:23,120 Speaker 2: the companies and grow, that's fine, but there comes a 30 00:01:23,240 --> 00:01:28,800 Speaker 2: point when those entities become very substantial. And we have 31 00:01:29,000 --> 00:01:32,880 Speaker 2: had instances in the past where we've allowed mergers to 32 00:01:32,959 --> 00:01:35,800 Speaker 2: occur that have result in poor outcomes. And have I 33 00:01:35,880 --> 00:01:39,319 Speaker 2: given a specific example. I think historically people would look 34 00:01:39,360 --> 00:01:42,000 Speaker 2: back on the merger of Progressive when they brought food Stuffs, 35 00:01:42,160 --> 00:01:46,080 Speaker 2: which ended up with only two supermarket operators a news 36 00:01:46,080 --> 00:01:50,320 Speaker 2: center of large scales, that that was probably a poor 37 00:01:50,320 --> 00:01:54,040 Speaker 2: decision in hindsight, but comments commissioners working under the rules 38 00:01:54,280 --> 00:01:56,640 Speaker 2: that they had in place at that time. And what 39 00:01:56,680 --> 00:01:58,920 Speaker 2: we are suggesting now is we need to review that 40 00:01:59,040 --> 00:02:01,720 Speaker 2: and make sure that we don't allow mergers that in 41 00:02:01,800 --> 00:02:03,600 Speaker 2: hindsight we're going to look back and say, God, we 42 00:02:03,600 --> 00:02:04,280 Speaker 2: should stop that. 43 00:02:04,440 --> 00:02:06,640 Speaker 1: Yes, no, but you know, we're supposed to let the 44 00:02:06,640 --> 00:02:08,880 Speaker 1: free market do that do its thing. That's what we did. 45 00:02:08,880 --> 00:02:11,480 Speaker 1: That's what Roger Douglas sports isn't. I can't imagine, in fact, 46 00:02:11,520 --> 00:02:12,800 Speaker 1: act being very happy about this. 47 00:02:13,960 --> 00:02:17,880 Speaker 2: Oh no, So it's fine. It's not precluding mergers. But 48 00:02:18,560 --> 00:02:22,919 Speaker 2: there comes a point when if a certain industries where 49 00:02:22,960 --> 00:02:27,200 Speaker 2: they're dominated by a few smaller players ultimately lead to 50 00:02:27,240 --> 00:02:31,200 Speaker 2: outcomes where you can't get access to innovative services or 51 00:02:31,680 --> 00:02:36,360 Speaker 2: let's say even banking. Right, I'm pursuing it and trying 52 00:02:36,400 --> 00:02:39,799 Speaker 2: to encourage open banking, which means FinTechs come and operate 53 00:02:40,160 --> 00:02:44,560 Speaker 2: and offer alternative banking products. That's the type of outcome 54 00:02:44,600 --> 00:02:47,320 Speaker 2: we want to make sure that occurs. But we're doing 55 00:02:47,360 --> 00:02:49,960 Speaker 2: that because we're in a situation where we've got not 56 00:02:50,200 --> 00:02:53,120 Speaker 2: enough competition in the banking sector. What we're trying to 57 00:02:53,120 --> 00:02:55,359 Speaker 2: do is head that off for the past by these changes, 58 00:02:55,440 --> 00:02:59,239 Speaker 2: by looking at introducing and giving the Comments Commission greater 59 00:02:59,360 --> 00:03:02,600 Speaker 2: flexibility to assess mergers when they get to a point 60 00:03:02,840 --> 00:03:10,799 Speaker 2: where potentially they could exert overt and overbearing market power 61 00:03:10,840 --> 00:03:12,320 Speaker 2: on how that operates. 62 00:03:12,480 --> 00:03:15,080 Speaker 1: And while I've got you here, there's some new research 63 00:03:15,080 --> 00:03:17,480 Speaker 1: out from RFI Global that says that some retailers are 64 00:03:17,560 --> 00:03:20,760 Speaker 1: charging customers to use their credit card and the retailers 65 00:03:20,919 --> 00:03:24,600 Speaker 1: are pocketing it. How's your feed cap idea coming along? 66 00:03:25,639 --> 00:03:28,080 Speaker 2: We're the Commerce Commissioner is doing a lot of work 67 00:03:28,120 --> 00:03:31,079 Speaker 2: on a moment and I'm keen to make an announcement, 68 00:03:31,160 --> 00:03:33,679 Speaker 2: but yes, we want to make sure that New Zealanders 69 00:03:33,680 --> 00:03:36,520 Speaker 2: are not paying more than they ought to when they 70 00:03:36,960 --> 00:03:39,080 Speaker 2: go to buy their coffee and getting charged at the church. 71 00:03:39,240 --> 00:03:41,280 Speaker 1: Yes, thank you very much, Andrew Bailey, all the best, 72 00:03:41,280 --> 00:03:46,840 Speaker 1: Thank you, Commerce and Consumer Affairs Ministered. For more from 73 00:03:46,920 --> 00:03:50,160 Speaker 1: Hither Duplessy Allen Drive, listen live to news talks they'd 74 00:03:50,240 --> 00:03:54,240 Speaker 1: be from four pm weekdays, or follow the podcast on iHeartRadio.