Vetlife warned over potential price fixing

Potential price fixing with a rival has resulted in South Island veterinary firm Vetlife being sent a warning letter by the Commerce Commission.

A warning letter, a step below court action, while a lesser sanction, was one Vetlife, other veterinary firms and businesses in general should heed, commission chairman Mark Berry said.

``We have decided to issue a warning rather than commence court proceedings due to the limited extent of harm caused by the agreement and the limited duration of the anti-competitive conduct.''

Vetlife has 17 branches in Canterbury and Otago.

Only a court can find price fixing has occurred, but the commission believed Vetlife's behaviour in 2015 - when the company and a rival agreed the rival would not compete to supply a product - was likely a breach of the Commerce Act.

``We may draw this warning to the attention of a court in any future proceedings brought by the commission against Vetlife for other conduct in breach of the Act,'' commission head of competition Katie Rusbatch said in the warning letter to Vetlife.

``Previous warnings may be considered an aggravating factor in sentencing by the court for any future conduct.''

The letter said concerns arose when a buying group presented a prescription for Cepravin - a therapy for cows during drying off - to the rival firm, on behalf of a customer who historically dealt with Vetlife.

The agreement reached was that the rival firm would not compete to supply Cepravin to the customer.

``We consider that this agreement had the purpose of fixing, controlling or maintaining the price of Cepravin supplied to the customer,'' the commission said.

``The commission considers that Vetlife gave effect to the agreement by not submitting a competitive price for Cepravin to the customer.''

Despite the agreement, the customer accepted the price submitted by the rival company.

``We have taken this into account in reaching our decision not to commence proceedings,'' the letter said.

The commission has not named the rival company as it is not taking any action against it.

Vetlife director Adrian Campbell said the firm respected the commission's decision.

``The commission is quite clearly saying to us be careful how you conduct yourself in business . . . and we will continue to be careful.''

 - Mike Houlahan

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