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Stockmen square off for scrap in the High Court

By Jock Anderson

Friday 9th May 2003

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Accusations that listed agribusiness heavyweight Wrightson breached a Commerce Commission ruling by muscling competitors out of a strategic North Island saleyard are headed for the High Court.

Wrightson broke its silence in the row to reject allegations it was engaging in anti-competitive behaviour.

Wrightson has withdrawn access by Elders Livestock and listed Williams & Kettle to the Rangiuru saleyards at Te Puke in the Bay of Plenty.

Already holding two-thirds ownership of Rangiuru, Wrightson gained total control by leasing the remaining one-third share held by businessman, farmer, entrepreneur and former Affco director Hugh Green.

Wrightson then cancelled licences for Elders and Williams & Kettle to operate at Rangiuru and withdrew their access to the saleyards.

Wrightson offered to sell stock at Rangiuru on behalf on a commission basis but the other companies claimed no formal proposal was forthcoming from Wrightson and insisted they were entitled to use the yards.

Not so, according to Dr Freeth, who rejected anti-competitive claims saying Wrightson was under no obligation to offer saleyard access to anyone.

In a blunt response to Elders' and Willliams & Kettle's allegations Dr Freeth accused them of being unwilling to accept change and innovation in what was a "very different and dynamic market."

Rather than expect preferential treatment Elders and Williams & Kettle should build their own yards if the arrangement at Rangiuru did not suit them, Dr Freeth said.

Attempts by Elders and Williams & Kettle to negotiate a settlement with Wrightson have failed and as a result court proceedings have been filed in Wellington.

In a preliminary move the High Court was expected to rule any day on whether Wrightson would have to disclose to the other side information it considered commercially sensitive.

Elders and Williams & Kettle fear Wrightson could establish a monopoly at Rangiuru that could spread to other North Island yards, threatening competition and resulting in lower prices and higher costs to farmers.

No date has been set for the court hearing and Wrightson declined to comment.

Elders has operated at Rangiuru since 1997 and Williams & Kettle since 2000, alongside Wrightson.

Wrightson's termination notice took effect on September 1 last year but both companies have been able to continue using the saleyards under an agreement, pending a court resolution of the dispute.

Both ousted companies said they were keen to have an involvement in Rangiuru and had made a commitment to buy into the complex and put money into developing it, with Wrightson, into a live-weight selling complex.

Elders claimed Wrightson's move breached a 10-year-old Commerce Commission agreement and has serious implications for livestock farmers, threatening local jobs and established local businesses.

It could also have serious implications for other North Island centres, according to Elders New Zealand managing director Stuart Chapman.

Of the 28 saleyards in the North Island in which livestock companies share ownership, Wrightson has two-thirds ownership in 16, with the balance usually held by strong regional operators, in most cases Elders Livestock, Williams & Kettle and Allied Farmers.

By contrast the majority of South Island saleyards are owned by local farmers, with livestock companies also holding an interest.

After discussions with the Commerce Commission, Wrightson, Elders, Williams & Kettle and Pyne Gould Guinness agreed in 1993 on a criteria to allow financially stable and appropriately experienced livestock agents access to their saleyards.

The agreement intended to protect the integrity of the stock auction system without restricting access unnecessarily.

At the time the Commerce Commission said the criteria developed struck an acceptable balance between promoting a competitive environment and ensuring livestock agents had appropriate financial strength and experience.

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