Power company TrustPower Limited has agreed that it risked breaching the Fair Trading Act when it made claims to consumers that is "the only electricity supply company which is predominantly New Zealand-owned". The Act prohibits misleading and deceptive conduct.

"Many other electricity supply companies are not just 'predominantly New Zealand-owned', but are entirely New Zealand-owned," Commerce Commission Chair John Belgrave said.

TrustPower made the allegedly misleading claims in a Wrightson Limited "rural benefits" promotional brochure in November and December last year.

The Commission has ended its investigation with a settlement with TrustPower and a warning to Wrightson that it too risked breaching the Fair Trading Act.

In the settlement TrustPower has given signed undertakings, including that:

  • it agrees that it risked breaching the Fair Trading Act
  • it will write to all consumers who accepted the offer in the Wrightson's brochure and it will correct the claims that it made
  • it will publish corrective advertising in the NZ Farmer newspaper
  • the Commission will publicise the settlement, and
  • the Commission can take court action if the settlement is not honoured.

Mr Belgrave said that electricity retailing is an industry that has only recently become competitive and the Commission will continue to watch it closely.

"Consumers must be given accurate information for healthy competition to develop," Mr Belgrave said. "False or misleading claims hurt not only consumers but also competitors and can distort how competition develops, particularly in an industry where competition is new."

Background

The Fair Trading Act prohibits misleading and deceptive conduct, and false or misleading representations. It is part of New Zealand's competition law because accurate information is a vital for healthy competition.

The Commission's view is that TrustPower was at risk of breaching section 9 of the Act. Section 9 states: "No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."

TrustPower stated in the Wrightson's brochure:

"The alliance between Wrightson and TrustPower has just one aim: to provide our valued clients with real savings and improved services. We've gone into partnership with TrustPower because it has nationwide coverage and because it is the only electricity retailer which is predominantly New Zealand owned".

Media contact: Fair Trading Manager Rachel Leamy, Phone work (04) 498 0908

Senior Advisor Communications Vincent Cholewa, Phone work (04) 498 0920