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Carter Holt Harvey fined $1.85M for timber price fixing agreement with Fletcher in Auckland

Wednesday 26th March 2014

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Carter Holt Harvey, the wood company owned by Graeme Hart's Rank Group, was fined $1.85 million by the High Court for price fixing in the Auckland commercial timber market.

Carter Holt was ordered to pay the penalty, and its former manager Dean Dodds fined $5,000, after it entered into an understanding with Fletcher Building's distribution arm in late 2012 to fix prices for the supply of structural timber to commercial customers in Auckland, the Commerce Commission said in a statement.

The parties agreed to price MSG8 timber at cost plus an 8 percent margin, in breach of the Commerce Act, the Commission said. The cartel ran for six months before breaking down and during that time it was applied in about 10 percent of the jobs priced by Carter Holt through its building supply merchant Carters, the Commission said.

Justice Geoffrey Venning described the agreement as a "classic case of price fixing" but recognised it was not the most serious price fixing conduct.

Commerce Commission general manager competition Kate Morrison said price fixing harms competition and penalties were a necessary deterrent.

"This case reinforces that price fixing can attract high penalties even where the commercial gains are relatively modest and the conduct continues for a relatively short period," Morrison said. "Cartels have the potential to cause real harm to consumers by increasing prices and creating fewer choices."

Fletcher's distribution arm Placemakers was granted immunity after it discovered its involvement in the price fixing last year, told the Commission and cooperated with the investigation.

 

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