Enviro
Waste Services Ltd and its Nelson manager have been fined a total of $430,000
after trying to warn off competitor Transpacific Industries which had started poaching
customers by offering a better deal for waste tallow collection.
The Commerce Act prohibits business
behaviour having the effect of reducing competition.
The High Court was told that three
businesses operate in the upper South Island collecting waste oils: Enviro
Waste, Transpacific and Fulton Hogan.
Details of their respective market shares were supressed. Up to September 2012, Enviro Waste and
Transpacific had long-standing regular rounds for the collection of waste
cooking oil and frying fat from restaurants and takeaway shops. The pattern had been waste oils were picked
up for no charge, and no payment was made for the waste taken. This comfortable duopoly was shaken up in
late 2012 when Transpacific started offering payment for pickup and several
Enviro Waste customers indicated they would swap to Transpacific. Evidence was given that Darrell Askew, Nelson
manager for Bens Oil (the local trading name for Enviro Waste), rang
Transpacific’s Christchurch office berating them for stealing customers. In a later phone call, Mr Askew demanded
Transpacific leave his customers alone.
He threatened a price war against Transpacific unless it backed
off. Unbeknown to Mr Askew, one of his
telephone calls was recorded.
A complaint was laid with the Commerce
Commission. Enviro Waste admitted the
phone calls breached the Commerce Act.
It was ordered to pay a fine of $425,000 and contribute $25,000 towards
the Commission’s investigation costs. Mr
Askew personally was ordered to pay $5000.
The court was told Enviro Waste has been under new ownership and new
management since April 2013.
Commerce
Commission v. Enviro Waste Services – High Court (13.11.15)
16.005