The Commerce Commission has welcomed the commercial agreement reached between Eastland Port and forestry customers and confirmed its proposed inquiry into the Port’s pricing under Part 4 of the Commerce Act will now not proceed.

In 2011, Gisborne’s Eastland Port changed its pricing methodology and raised its wharfage and storage charges.

The Eastland Port Forestry Industry Customer Group (EPFICG), which is comprised of customers who export logs through the port, subsequently lodged a formal complaint with the Commission about the extent of the price increase. It claimed that Eastland Port’s new charges were the highest in New Zealand and asked the Commission to determine what the prices should be, and then to backdate them.

In June 2014, the Commission issued a preliminary assessment setting out its concerns with Eastland Port’s pricing conduct. The preliminary assessment noted that the Commission would undertake a Part 4 Inquiry in 2015, unless there were changes in any material circumstances which changed its views on initiating the inquiry. The preliminary assessment left open the option of Eastland Port commercially resolving the pricing dispute with EPFICG.

Commission Chair Dr Mark Berry said EPFICG had written to the Commission confirming that a commercial resolution had now been reached.

“As the Port has responded positively to our preliminary assessment we have been able to avoid the need to go through the long and potentially costly Part 4 Inquiry process. We are pleased that this issue has been resolved in the best long term interests for consumers and all parties involved,” Dr Berry said.

Further information on the Eastland Port matter, including a copy of our preliminary assessment, can be found here. Information on Part 4 inquiries can be found here.