Carter Holt Harvey agrees penalties of almost NZ$2M with New Zealand Commerce Commission related to proceedings accusing company of entering understanding with Fletcher Distribution to fix structural timber prices for commercial construction in Auckland

LOS ANGELES , March 20, 2014 () – Carter Holt Harvey (CHH) has agreed with the New Zealand Commerce Commission to a penalty of NZ$1.85 million related to its part in price-fixing in the Auckland timber market, according to New Zealand media reports.

As reported by Industry Intelligence on Dec. 20, 2013, the Commerce Commission filed proceedings against CHH that accused the company of entering an understanding with Fletcher Distribution Ltd. to fix structural timber prices for commercial construction in Auckland. The commission said the understanding operated during the latter part of 2012 and early 2013, Radio New Zealand reported on March 19.

CHH and company sales manager Dean Dodds, against whom charges were also filed, co-operated with the commission’s investigation, admitting their conduct had breached the Commerce Act, the Otago Daily Times reported on March 19.

Commerce Commission lawyer John Dixon said CHH had agreed to a recommended penalty of $1.85 million for the company, and a further fine of $5,000 fine for Dodds’ role, as it was accepted that Dodds did not deliberately set out to breach the Commerce Act.

Fines and penalties incurred under Section 30 of the Commerce Act, which makes price-fixing agreements between competitors unlawful, can be as high as $10 million, according to the Otago Daily Times.

When it announced the action against CHH last fall, the commission said proceedings had not been filed against Fletcher Distribution, which, on discovering its “involvement in the understanding,” had made the commission aware of the situation, and co-operated with the investigation, the Otago Daily Times noted.

Dixon said the price fixing related to MSG-8 timber, and operated from two of Fletcher's Placemakers shops in Auckland, Radio New Zealand reported. While it had not been possible to determine the exact commercial gain made by the companies, Dixon said Fletcher had indicated its shops had benefited by $100,000.

The judge at a penalty hearing in the High Court at Auckland has reserved his decision, according to Radio New Zealand.

The primary sources of this article is are Radio New Zealand, Auckland, New Zealand, on March 19, 2014 and the Otago Daily Times, Dunedin, New Zealand, March 19, 2014. To view the Radio New Zealand version of the article, click here; and to view the Otago Daily Times version, click here.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.