23 Dec 2015

Livestock firms fined for price fixing

7:47 am on 23 December 2015

Two livestock companies have been fined more than $3 million for their part in price fixing during the introduction of a national animal-tagging scheme.

Federated Farmer's Manawatu-Rangitikei

The government introduced National Animal Identification Tracing in 2012. Photo: RNZ

PGG Wrightson was fined $2.7 million and Rural Livestock $475,000 in the High Court in Auckland today.

The fines relate to price fixing when the National Animal Identification Tracing (NAIT) scheme was introduced in 2012.

The Commerce Commission started an investigation into livestock companies' fees in relation to NAIT following a complaint from a Northland farmer.

The commission said the companies breached the Commerce Act when they agreed to set fees for tagging animals, yard fees and other administration fees to trace cattle.

PGG Wrightson chief executive Mark Dewdney said the company was the leader in setting the fees but it did not realise its actions were unlawful.

"Our team communicated to other livestock companies, all of whom were members of the same association, the fees that we were planning to charge to cover our costs.

"Other companies followed those fees and that was a technical breach of the Commerce Act."

The Commerce Commission said cases against Elders New Zealand and five individuals remained before the courts.