Monopoly: Commerce Commission v. Alderson Logistics

  

Andrew and Susan Alderson’s transport company enjoyed a monopoly over supply of bulk wood shavings to Waikato poultry farmers after buying up the then two top suppliers in 2022, a business strategy later costing their business a $420,000 Commerce Act penalty for anti-competitive behaviour.  This monopoly was broken by new suppliers entering the market some thirty months later, offering a better deal.

Based in Auckland, Alderson Logistics Group provides transport services across the North Island.

The High Court was told of Aldersons’ policy decision in late 2021 to gain control of trucking operations delivering bedding for goats and chickens in the Waikato.

Alderson Group purchased two suppliers which between them then controlled eighty per cent of the market, buying up wood shavings from timber mills for delivery to goat and chicken farmers.   

There is no bedding product substitution available for chickens; Primary Industries requires use of untreated wood shavings for poultry welfare.  There are limited product alternatives for goat bedding.

The two acquisitions gave Aldersons a monopoly for supply in the Waikato.

Aldersons’ legal advisers for the purchases did not suggest Commerce Commission clearance might first be required.  Commission sprung into action only after a customer’s complaint. 

The High Court was told prices for supply increased markedly after Aldersons’ acquisitions.

This was justified by a ‘supply shock’ from mid-2023, Aldersons said.

A number of timber mills in the region closed down.

And Aldersons was in competition for wood shavings from a new industry, manufacturing wood pellets from shavings for use as heating fuel.

Commerce Commission intervention saw a 2024 agreement that Alderson Group would divest part of its wood shavings/animal bedding operations, accepting a warning for its prior anti-competitive merger.

Ultimately, there was no divestment.

A formal sale process was initiated through an investment bank.

There was interest from only one prospective buyer.  No sale was inked.

Commerce Commission changed tack, cancelling the need for divestment, taking High Court action declaring Alderson Group breached Commerce Act merger rules.

Approving an agreed settlement, Justice Gardiner imposed a $420,000 fine.

Alderson Group’s financial details were supressed.

Alderson claims it ran at a financial loss for the years 2023-25, with further losses forecast for the 2026 year.

Commerce Commission v. Alderson Logistics Ltd – High Court (6.03.26)

26.094

Price-fixing: Commerce Commission v.Aramex

  

After courier company Aramex admitted a 2021 tie-up with logistics company Zappy amounted to cartel behaviour, High Court approved a $700,000 penalty negotiated between Aramex and Commerce Commission.  Zappy agreed not to poach Aramex customers without prior approval, and if approved, not to undercut Aramex fees. 

Singapore-owned Aramex NZ gained a New Zealand foothold with its 2016 purchase of Fastway Couriers.

Aramex is now the third largest courier company in New Zealand, with over three hundred individual courier-franchised territories in operation. 

In late 2021, Aramex negotiated a re-sellers agreement with Zappy, then known as Payport.

Zappy owns cloud-based software used to track courier deliveries in real time, a system integrated across New Zealand’s retail and transport industries.

Aramex told the High Court that the 2021 agreement was drawn up by its national sales manager who simply copied a template document used previously by a Fastway subsidiary, deleting names of the original contracting parties and substituting Aramex and Zappy as the new contracting parties.

No one read the document in any detail.

Aramex was unaware clauses in this contract breached the Commerce Act.

The High Court was told the cartel agreement was scrapped as soon as a Commerce Commission investigation commenced.  Aramex co-operated fully with the investigation.

Commission said the extent of any financial benefit gained by Aramex could not be quantified.

Aramex claims there was ever only one instance of Zappy making contact to co-ordinate pricing for a courier contract.

Commerce Commission v. Aramex New Zealand Holdings Ltd – High Court (4.03.26)

26.093

Banking: Financial Markets Authority v. ASB

  

ASB was ordered to pay a $2.1 million penalty after overcharging customers for nearly a decade, with the penalty increased in part because of its failure to act promptly on staff warnings.

In 2013, a member of the Bank’s wealth team was told to shut up after sending some sixty emails to his line manager warning that client insurance policy discounts were being wrongly calculated.

It was not until 2021, after a then recent royal commission on banking in Australia heavily criticised operation of retail banks, that ASB senior management sat up and took notice of the problem.

The High Court was told that since 2011 ASB staff had been miscalculating some insurance premium discounts for policies sold on behalf of IAG Insurance.

Confusion saw premium discounts not being given when bank customers had more than one qualifying IAG policy, and also discounts wrongly given when customers had more than one policy which included caravan and motorbike policies which were not eligible for a premium discount.

ASB and IAG jointly agreed to reimburse affected customers; ASB’s share being $2.9 million.

The High Court was also told ASB did not apply promised bank fee reductions for many FastNet business customers for the period 2011 through to 2020.

ASB senior management did not become aware of the extent of the problem until a mid-2019 ‘deep dive,’ following up complaints from business customers.

The fact bank fees were disclosed on business customer accounts as a single line item kept the issue hidden for years.  Anomalies only became apparent after some business customers asked for a detailed breakdown of fees charged.

Errors were found in 21 per cent of business accounts.

ASB told the High Court that the mistake was unintentional, not pursued for financial gain.

Errors arose because granting a fee concession was a manual procedure.  The Bank had no systems in place to ensure discounts were properly applied.

ASB self-reported its mistakes to Financial Markets Authority, admitting to breaches of the Financial Markets Conduct Act; making false and misleading statements in its provision of financial services.  Advertised discounts were not applied as promised.

ASB negotiated a $2.1 million penalty with Financial Markets Authority.

This penalty was approved by the High Court.

FMA has first claim on this money; recovering its costs.

Financial Markets Authority v. ASB Bank – High Court (4.03.26)

26.092

Asset Forfeiture: Commissioner of Police v. Piper

  

Partnership law principles underlie Police ability to selectively recover unlawful gains from ‘joint enterprise’ criminal activity; participants having the most readily accessible assets can wind up bearing the cost, their impecunious colleagues escaping proceeds-of-crime liability.

Meth production in Northland through 2021 saw Martin John Piper and Troy Kakau both facing asset forfeitures under the Criminal Proceeds (Recovery) Act.

The High Court was told of Piper sourcing precursor chemicals, supplied to Kakau who oversaw production of methamphetamine.

Both were convicted of drug offences.

Police calculation of the volume produced, and revenue earned, was helped by communication intercepts in which the two congratulated themselves on their meth cook’s skills; yielding 90 per cent meth from each kilogram of ephedrine supplied by Piper.

Forfeiture of assets to the value of $639,500 was ordered, as revenue earned from their criminal activity.

For Piper, in dispute at the High Court was: what credit could be claimed for an earlier criminal proceeds recovery against co-offender Kakau, and; whether a house on Admiralty Drive at Haruru in the Bay of Islands, registered in the name of Piper’s partner, could be confiscated.  

Evidence was given of Piper and his partner Lisa May O’Sullivan jointly purchasing Admiralty Drive back in 2015.

Whilst in custody, and before his criminal trial for meth dealing, Piper gifted his Admiralty Drive half share to Ms O’Sullivan; to ease insurance difficulties, he later told the High Court. 

Insurance was difficult to obtain when he faced criminal charges, he claimed.

Justice O’Gorman subsequently ordered forfeiture of Admiralty Drive, being financed from proceeds of crime. Ms O’Sullivan either knew mortgage payments came from proceeds of crime or deliberately refrained from asking questions that might confirm her suspicions, Justice O’Gorman ruled.

The High Court was told of assets previously being seized from Piper’s co-offender Troy Kakau to the value of $114,900; forfeited by court order as proceeds of crime for Kakau’s involvement in their joint meth activities.

Piper claimed a credit on any asset forfeiture order made against him for this earlier recovery from his co-offender.

Justice O’Gorman ruled a credit is necessary to avoid double-counting, unless the precursor chemicals provided by Piper were unrelated to batches of meth cooked by Kakau for which his assets were confiscated.

For Criminal Proceeds (Recovery) Act forfeitures, joint criminal ventures are treated as if they were law-abiding business partnerships.

With co-offenders jointly and severally liable to forfeit proceeds of their criminal activity, authorities may choose to chase all, or just one, for the amount due.

The High Court was told assets to the value of $114,900 previously confiscated from Kakau as proceeds of crime amounted to the full value of his then available assets: $79,300 cash plus proceeds from sale of his Holden ute and Harley Davidson motor bike.

Piper was held liable for the balance of their joint criminal enterprise ‘proceeds of crime debt:’ $524,600.

The High Court ordered sale of Admiralty Drive, together with sale of Piper’s two Land Rovers and his boat.  Cash totalling $26,200 was also confiscated.

The court was told Piper has form; previously in 2014 having cash, cars and a boat seized following a court-ordered proceeds of crime forfeiture.

Commissioner of Police v. Piper – High Court (3.03.26)

26.091