One problem that the Commerce Commission found occurring again and again in 1995 was illegal pricing.

Commission Chairman Dr Alan Bollard said while no goods or services are under price control, the Fair Trading Act prohibits false or misleading claims about prices and the Commerce Act prohibits competitors colluding to fix prices.

These two parts of the law provided plenty of work for the Commission this year, and will probably continue to next year.

Importantly for that future work the Commission won key court cases this year setting precedents that apply to all retailers. It has also started further court action against other companies.

Landmark precedents were set when the Court of Appeal defined when free promotions are misleading, and the Auckland District Court convicted Mt Albert TV for a misleading interest free promotion.

"The Courts have supported our view that free means no extra cost, and interest free means the same as the advertised cash price," Dr Bollard said.

Details of the law covering interest free promotions, free offers and claimed savings should be further defined next year through three prosecutions of major retailers. Farmers and Noel Leemings have pleaded not guilty to charges relating to, respectively, free offers and interest free promotions. Bond and Bond has not yet entered a plea to 16 charges relating to savings and special promotions.

Overall the Commission took Fair Trading Act enforcement action more than 400 times during the year, and on almost half those occasions it was against false or misleading prices. Most of the action involved warnings or out of court settlements. The Commission will not offer a settlement unless it is prepared to take court action should the settlement be rejected.

Under the Commerce Act, the Commission concluded a major investigation of the North Island meat industry by starting court action against 12 companies and 21 individuals it has alleged were parties to a long standing arrangement to fix prices paid to farmers for livestock.

The companies are Taylor Preston, Affco, Lowe Walker, Richmond, Huttons Kiwi, Benmore Products, Waitotara Meat, Greenlea Premier Meats, Waikato Beef Packers, Walford Meat, CR Grace and Te Kuiti Meat Processors.

It also accepted settlements from South Auckland lawyers Martin Strong and Brett Abraham, Rotorua rafting company River Rats Rafting, Christchurch dive shops Underwater Sports and Divers' World, and tourist company PA Tours after four separate investigations of alleged price fixing.

In a price related matter, though not price fixing, the Auckland High Court ordered the New Zealand Motor Body Builders' Association to pay a penalty of $15,000 for refusing membership to panel beaters who advertised discounts.

"Prices are always a major factor in customers' buying decisions, and they are a major factor for businesses competing against each other" Dr Bollard said.

"Whether it is by misleading claims about savings or hidden costs, or by competitors price fixing, customers lose out, honest businesses lose out and competition cannot work properly."

Media contact: Communications Officer, Vincent Cholewa

Phone home (04) 479 1432