Govt Launches Review to Strengthen Competition Laws and Combat Monopolies

“Improving competition is one of the most effective ways to enhance productivity and raise living standards,” Minister Bayly stated.

The Government has announced a comprehensive review of New Zealand’s competition rules to tackle monopolistic practices and boost economic productivity, Commerce and Consumer Affairs Minister Andrew Bayly said today.

“Improving competition is one of the most effective ways to enhance productivity and raise living standards,” Minister Bayly stated.

New Zealand has long struggled with limited competition across key sectors, including groceries, banking, and building supplies. A notable example was the 2022 plasterboard shortage, which exposed vulnerabilities in market competitiveness.

OECD studies have found that New Zealand lags behind international peers in competition. "Many Kiwis don’t need a study to tell them this—they experience it daily through high prices and limited options,” said Mr. Bayly.

Two-Pronged Review Approach

The Government’s review focuses on:

Updating the Commerce Act: Revising merger policies to prevent market dominance while allowing beneficial efficiencies.

Assessing the Commerce Commission: Enhancing governance and operational effectiveness to regulate and enforce competition laws more robustly.

“Our merger framework hasn’t been updated in over 20 years, during which time the economic landscape has evolved significantly, leading to concentrated market power in several sectors,” Minister Bayly noted.

The review will evaluate whether a board structure with sector-specific commissioners could enhance the Commission’s accountability and strategic focus.

Leadership and Timeline

The review will be led by Dame Paula Rebstock, a respected economist and former chair of the Commerce Commission, alongside competition experts Professor Allan Fels and David Hunt. The final report is expected by May 2025.

International Alignment and Expanded Responsibilities

The review aligns with similar efforts underway in Australia, reflecting the economic interdependence of the two nations. It also comes at a time when the Commerce Commission’s responsibilities have expanded into groceries, fuel, and payment systems.

Broader Economic Impacts

The Government anticipates significant benefits from stronger competition laws, including:

Lower Consumer Prices: Driving affordability in everyday goods and services.

Increased Innovation: Encouraging businesses to invest and improve offerings.

Economic Growth: Boosting productivity and efficiency across sectors.

Minister Bayly emphasized the broader importance of the initiative. “These reforms are about establishing a robust competition framework that ensures fair markets, drives down the cost of living, and positions our economy for long-term success.”

Next Steps

The Government will conduct targeted consultations with stakeholders across sectors to gather input on the proposed changes. Parallel to this, efforts will continue to monitor emerging markets and adapt the competition framework to address new challenges, such as the role of digital platforms and technology in shaping market dynamics.

This ambitious review underscores the Government’s commitment to creating fair, competitive markets that work for all New Zealanders.