The Commerce Commission has started court action against vehicle ferry operator, Fullers Cruises Northland Limited, and Far North District Council business, Far North Maritime Limited, alleging that their lease for ramps for vehicle ferries is anti-competitive and breaches the Commerce Act.

Commission Chairman Peter Allport said that the Commission has filed a Statement of Claim and court documents have been served on the defendants.

Far North Maritime owns ramps at Opua and Okiato Point that Fullers uses for vehicle ferry services in the Paihia and Russell areas of the Bay of Islands. Far North Maritime has granted exclusive occupancy and control of the ramps to Fullers.

Vehicles that do not use Fullers' ferry service face a 40-minute drive along a narrow, winding and partially unsealed road. In the Commission's view, new ferry ramps to compete with the existing ones cannot practicably be built.

The Commission is alleging that the lease between the two companies is anti-competitive and breaches section 27 of the Act. This section prohibits contracts, arrangements or understandings that have the purpose or effect of substantially lessening competition in a market.

The Commission is also alleging that the exclusive lease gives Fullers a dominant position in a market and Fullers has used its dominance to prevent a new entrant providing a rival service. Section 36 of the Act prohibits the use of a dominant position for an anti-competitive purpose in any market.

In the Commission's view the relevant markets are those for the provision of vehicle ferry services, and for access to vehicle ferry ramps, in the Paihia/Opua and Russell/Okiato Point area.

Background

Statement of Claim

The Commission has filed its proceedings on the Commercial List in the Auckland High Court. Under the High Court Rules the release of this document is a matter for the Court, its officials or for the defendants.

Penalties

The High Court can impose penalties of up to $5 million against an organisation and up to $500,000 against an individual. It can also impose a wide range of orders and injunctions. In this case, the Commission is not taking action against any individuals.

Media contact: Commerce Act Manager Jo Bransgrove

Phone work (04) 498 095

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commission media releases can be viewed on its web site www.comcom.govt.nz