Commerce Commission

It took 3 years but we warned you

Three years ago we warned readers about a telco called Intagr8.

Unfortunately we were right and the company has now collapsed.

A controversial telecommunications company accused of misleading sales tactics has collapsed, leaving thousands of business customers around the country in the lurch.

Intagr8 Ltd was placed in liquidation on Thursday, the same day that Vodafone announced it was severing ties with the company. It is understood Vodafone is owed at least $1m.

Intagr8 offered bundled deals for phones and equipment and the collapse means around 2500 business customers around New Zealand are left with finance company contracts, but potentially no phone lines.

According to the Companies Office website, Damien Grant of Waterstone Insolvency was appointed liquidator on Thursday and his first report is due next week.

Grant said he would investigate why the business failed, but Intagr8’s owner Murray Taylor had blamed it on negative publicity.    Read more »

Stuff the business backlash, the Commerce Commission is a joke

Richard Harman from Politik reports that big business is feeling a bit hurty over proposed changes to the Commerce Commission by Paul Goldsmith.

Though Commerce and Consumer Affairs Minister Paul Goldsmith is playing it down, a Government review of competition law that he announced yesterday has the potential to make radical changes that could affect some of New Zealand’s largest companies.

Mr Goldsmith describes the review as a “health check” on the current law.

But accompanying documentation from the Ministry of Business, Innovation and Employment says the current law, administered by the Commerce Commission.

The Ministry argues that it has not been working satisfactorily because it is:

  • failing to punish anti-competitive conduct by powerful firms and
  • too complex to allow for cost-effective and timely application,

Commenting on the announcement, the law firm Chapman Tripp, says the prospect of amendments to the Commerce Act will have implications for the commercial and compliance strategies of New Zealand’s most strategically important companies.

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It’s the lack of enforcement, dumb ass. It always is.

Prime Minister John Key says he’s not sure why more mobile truck shop operators aren’t being prosecuted.

A year-long Commerce Commission investigation into 32 traders found 31 of them were in breach of the Fair Trading Act, Consumer Finance Act and the Credit Contracts Act, but only a couple are being investigated further.

“Why they’re not prosecuting all of them, I don’t know,” Mr Key said on the Paul Henry programme this morning.

“But ultimately… people need to be held to account.”

Labour has called for truck shop operators to be licensed, so their right to do business can be simply revoked.

“One of the easiest things to do is get in a truck and go around and sell goods – you don’t have to be licensed, there’s no checks on you, you’re preying on the vulnerable,” he said last week.

Mr Key says the Government will look into why the Commerce Commission isn’t taking a harder line. Read more »

The difference between Aussie regulators and Kiwi ones

Here in New Zealand serious allegations were levelled at Countdown for the way they were raping their suppliers.

The Commerce Commission received more than 90 complaints from informants and they decided that there was nothing to see here and told everyone to move along.

In Australia the Australian Competition and Consumer Commission (ACCC) took Coles to court and slammed them. Coles is now making multi-million dollar payouts tot heir suppliers.

The Coles supermarket chain has refunded millions of dollars to suppliers as part of a dispute resolution process.

Coles appointed former Victorian premier Jeff Kennett as an independent arbiter after the Australian Competition and Consumer Commission (ACCC) took the company to court over claims of unconscionable conduct towards its suppliers.

Mr Kennett recommended the supermarket suppliers, including farmers and food processors, be awarded financial settlements as part of that process.

In December last year, the Federal Court found Coles had demanded payments from suppliers to which it was not entitled by threatening harm to suppliers, and withheld money from suppliers it had no right to withhold.     Read more »

Bring back Dave – All is forgiven

After the PR debacle Countdown went through telling Kiwi suppliers that ‘all is well, we’ll look after you’ during a Commerce Commission investigation, you’d think Countdown would get back to basics.

But their recent print ad seems to suggest they’re having an identity crisis and now want to be a hardware store.

Mark Reynolds, who in between being the spin merchant for Todd Corp’s Nova Energy and picking fights with hater Giovanni Tiso and dreary Drinnan, posted a print ad for Countdown.

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Milford Asset Management are blaming “the web guy” – not taking responsibility

Milford Asset Management says it has contacted other KiwiSaver fund managers to explain an “inadvertent breach of conventions” in Google search terms used for marketing purposes.

This comes after rival fund manager Fisher Funds lodged a complaint about Milford’s use of its brand in a so-called “ambush marketing” campaign where it used other KiwiSaver providers’ names to try to attract potential customers to its own website by paying for search words.

Hence, when someone typed “Fisher kiwisaver” into Google, an ad for “Milford Fisher KiwiSaver” topped the search list with a link to the Milford website.

“It has never been our intention to use such tactics in our marketing,” Milford managing director Anthony Quirk said today.

Except that you were.   And this is yet another incident in Milford Asset Management’s murky existence.  You have to love it – a business that depends on trust more than most, and they simply don’t appear to care unless they’re caught.   Read more »

More unethical behaviour from Milford Asset Murkiness

The tip line is running hot with financial industry people contacting us with snippets of unethical practices by Milford Asset Murkiness, excuse me, Management. Thank you for the tips – we are working to ensure the FMA is made aware of some of the alleged behaviour of Milford.

One of the more intriguing tipoffs is the proven ambush marketing Milford are engaging in with paid Google search.

There is widespread abuse by Milford in ambush marketing using Google search. This is where they use the name of one of their competitors in their own paid search result to try and confuse the person searching about Kiwisaver.

For example, one of the smaller but fast growing Kiwisaver funds operators is a firm called Generate. I’ve never heard of them before now, but they’re obviously getting some traction as they’ve won some awards recently. But tellingly, they are the victim of Milford’s ambush marketing.

If you go to Google and search for “Generate Kiwisaver”, the first link that comes up is an ad for Milford. That’s not surprising, companies will often invest heavily in making sure their own name comes up ahead of competitors in Google searches relevant to their industry.

But what the Milford Ad says is very interesting and raises questions about their ethics.

Apparently, they call themselves in their ad “Milford Generate Kiwisaver”.

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NZ is the only country where Internet access is getting more expensive

Spark, Vodafone and Callplus together represent 94 percent of the residential internet market and all have put up their prices for home internet packages.

Internet service providers blame the rises on the Commerce Commission’s recent draft decision which reduced the price companies pay for use of the copper wire network.

The charges relate to what Chorus (the wholesaler) charges internet service providers and telcos like Spark, Vodafone, Orcon, Slingshot and Flip, for accessing their copper infrastructure which was deployed years ago by the Post Office. Those wires run down almost every street in the country and are the phone lines we have been using for decades.

Because it is a monopoly, the price that the wholesaler can charge is regulated by the Commerce Commission.

In 2011, when Telecom was split into a retail arm (Telecom) and a wholesale arm (Chorus), the Commission had to work out what Chorus’s wholesale services were worth, and what price they would charge internet service providers and telcos, including Telecom (now Spark) to use those services.

The price was originally set at about $45 per customer per month. Read more »

Which is easier, Andrew Little or Countdown PR job?

We’ve seen the fiasco that surrounded the recruitment process for a PR person to help people discover who Andrew Little is.

Now we see our favourite supermarket owner Progressive Enterprises (owners of Countdown) trying to boost their PR efforts after a dismal 2014.

You’ll remember how Countdown was under the pump while the Commerce Commission investigated more than 90 complaints from suppliers for their strong-arming of local suppliers.

The Commerce Commission surprisingly didn’t find anything… while in Australia, the ACCC investigated a remarkable similar story and slammed a supermarket chain (COLES) with millions in fines.

Countdown has some work to do repairing its reputation with suppliers in New Zealand. So let’s have a look at the job requirements and see how important supplier relationships are to Countdown.   Read more »

If brains were dynamite our Commerce Commission wouldn’t have enough to blow their nose

Our Commerce Commission recently received more than 90 complaints from suppliers being strong armed by Progressive/Countdown.

They had a cursory look and found…nothing.

Countdown, despite the more than 90 complaints claimed vindication.\Meanwhile in Australia, their ACCC has found a remarkably similar story…and slammed the supermarket chain they nailed with millions in fines.

Australian supermarket chain Coles will pay A$11.25 million in fines and costs and potentially far more refunding suppliers for illegally squeezing them for funds.

The food and liquor giant’s settlement with the Australian competition watchdog over charges of unconscionable conduct in its treatment of grocery suppliers was accepted by the Federal Court on Monday.

The nation’s second largest supermarket chain had deliberately and illegally misused its market power to squeeze small suppliers for money, judge Michelle Gordon told the court.

The verdict was welcomed by the Australian Food and Grocery Council, which also applauded Coles and Woolworths for working with it on a code of conduct.

However the industry body has warned members in writing about Woolworths also seeking to recoup money for “profit gaps”, although it has not facing any charges.

The payments to Coles filled what it called its “profit gaps” or targets, which in reality meant profit shifting and deducting money it was supposed to pay suppliers.

Because Coles represented a significant proportion of the small suppliers’ sales, it was able to successfully pressure them by threatening to stop buying their products, the court found.

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