The Commerce Commission and Carter Holt Harvey have agreed to
a penalty of $1.85 million for the company's part in price
fixing in the Auckland timber market.
The commission in December last year filed proceedings in the
High Court against Carter Holt Harvey and one of the
company's managers Dean Dodds.
According to the regulator, CHH entered into an understanding
with Fletcher Distribution, which is part of Fletcher
Building, to fix prices in respect of the supply of
structural timber to commercial customers in Auckland, in
breach of the Commerce Act.
At the same time as announcing the action, the commission
said it had not filed proceedings against Fletcher
Distribution because it had been granted immunity in
accordance with its "cartel leniency policy".
"Fletcher Distribution discovered its involvement in the
understanding earlier this year, made the commission aware of
the situation, and co-operated with the commission's
investigation," the commission said.
CHH and Dodds had also co-operated with the commission's
investigation, and both had entered settlements with the
commission in which they admitted that their conduct breached
the Commerce Act, the regulator said at the end of last year.
A penalty hearing is underway before Justice Geoffrey Venning
in the High Court at Auckland.
Commerce Commission lawyer John Dixon said the parties had
reached an agreement that the penalty for CHH should be $1.85
million and recommended this figure be the fine the judge
The $1.85 million included a discount given to the company
for co-operating with the regulator and admitting the
allegations, Dixon said.
For Dodds, Dixon said he did not deliberately set out breach
the Commerce Act and that this wasn't a case of meetings in a
smoke-filled room or on a golf course to arrange a cartel.
But at some point Dodds must have known or ought to have
known what he was doing was wrong, Dixon said.
Dixon submitted that Dodds personally should be penalised
Dodds should be entitled to a discount for his earlier
admission of liability and co-operation with the commission,
The hearing continues.
Section 30 of the Commerce Act makes price-fixing agreements
between competitors unlawful. A company contravenes section
30 may be ordered to pay penalties under section 80 of the
Commerce Act. The penalty can reach up to $10 million.
Fletcher Building last year said it had come aware of
"price-fixing"activity during a regular audit. The activity
involved some people at two Auckland stores, PlaceMakers Cook
Street and Mount Wellington.
-By Hamish Fletcher of the New Zealand Herald