The Government is seeking public feedback on whether to criminalise cartel behaviour such as price-fixing.
Commerce Minister Simon Power says cartel activities are the most harmful forms of anti-competitive business behaviour.
Mr Power says they reduce economic output, undermine trust in markets and distort the market as cartels appear more profitable than they really are.
He says businesses suffer and so do consumers, who have to pay inflated prices.
Mr Power says many cartels are so big that the current fines are not a deterrent and further measures may be needed.
He says introducing criminal penalties, including imprisonment, could be a strong deterrent to organisations contemplating hard-core cartel behaviour.
The minister says New Zealand needs to keep in step with other countries that have criminalised cartel behaviour.
Submissions close at the end of March.