Mark Berry Con­sumer cham­pion or pa­per tiger?

Con­sumers’ cham­pion or pa­per tiger?

The Press - - Front Page - Words: An­drea Vance Im­age: Chris Skel­ton

Mark Berry and his wife have just up­graded their teenaged cars for new mod­els. Af­ter care­fully weigh­ing up plug ver­sus pump, the Ber­rys de­cided against an elec­tric ve­hi­cle.

But a decade from now Berry sees many more EV own­ers on our roads. Petrol sta­tions will be­gin to close, the mar­ket will be dis­rupted, he pre­dicts.

As Com­merce Com­mis­sion boss, it is a mar­ket he is about to put un­der close scru­tiny.

The re­tail fuel mar­ket will be the first mar­ket study un­der­taken un­der new pow­ers just granted to the com­mis­sion.

Over­seas com­pe­ti­tion cham­pi­ons have long had those pow­ers – and Berry says it was over­due here. ‘‘There are oc­ca­sions when we have looked at some­thing and thought: there is some­thing not right here, this mar­ket is not work­ing – but we are go­ing to close the file be­cause we don’t have an ac­tion that we can take,’’ he says.

The watch­dog will de­liver a first draft of its re­port in Au­gust. By then Berry will have gone – he is step­ping down in May, af­ter 10 years as chair.

Born in In­ver­cargill, the son of a ra­dio jour­nal­ist, Berry spent much of his child­hood in Dunedin. He stud­ied law at Otago Univer­sity, re­turn­ing later to teach. Af­ter a spell at a prom­i­nent firm, he left to study at the Ivy League Columbia Law School.

A spell in Mel­bourne in the mid-80s got him up to speed on Aus­tralian’s com­pe­ti­tion laws. New Zealand adopted a sim­i­lar regime – the Com­merce Act in 1986.

As a bar­ris­ter, Berry was in­volved in the ini­tial ap­pli­ca­tion by oil com­pa­nies to jointly sell gas from Taranaki’s Po­hokura field – a de­ci­sion that came be­fore the Com­merce Com­mis­sion.

He also did reg­u­la­tory work for the Orion elec­tric­ity distri­bu­tion net­works in Can­ter­bury.

When Paula Reb­stock stepped down as Com­merce Com­mis­sion chair­woman in 2009, Berry took over. He pre­vi­ously served as deputy chair be­tween 1999 and 2001, when it was asked to rule on the dairy co-oper­a­tive merger which es­tab­lished Fon­terra.

‘‘It did all hap­pen fairly quickly, I have to say,’’ Berry says of the top job. ‘‘I didn’t give it a great deal of thought . . . it is a re­ally chal­leng­ing and in­ter­est­ing place to be.’’

The com­mis­sion en­forces the laws around com­pe­ti­tion, fair trad­ing and con­sumer credit con­tracts (like mort­gages, per­sonal loans or over­drafts). It also reg­u­lates elec­tric­ity lines, gas pipe­lines, air­ports, telecom­mu­ni­ca­tions and dairy sec­tors – where com­pe­ti­tion can be limited.

When Berry ar­rived, the com­mis­sion was im­mersed in im­ple­ment­ing the reg­u­la­tion of lines busi­nesses, nat­u­ral gas ser­vices and air­ports. The aim was to en­sure they do not gen­er­ate ex­ces­sive re­turns from their mo­nop­oly ac­tiv­i­ties.

The com­mis­sion was chal­lenged in the courts – a lit­i­ga­tion bat­tle that lasted three years and pit­ted it against dozens of lawyers hired by Auck­land, Welling­ton and Christchurch air­ports, Air New Zealand, Pow­erCo, Trans­power and Vec­tor.

‘‘The first five years here were re­ally dom­i­nated by that,’’ Berry re­calls. ‘‘You are talk­ing big num­bers and that is dol­lars for the ev­ery­day con­sumer.

‘‘The elec­tric­ity com­pa­nies alone were seek­ing to in­crease the value of their as­sets by $2 bil­lion – we pre­vailed in to­tal in that case. If we hadn’t, elec­tric­ity bills would be higher as a re­sult.’’

Staff had just 12 months to fin­ish the com­plex task of as­sess­ing the cost of cap­i­tal and val­u­a­tion of as­sets. So Berry’s not daunted by the 12-month time­frame set for the fuel in­ves­ti­ga­tion – de­spite pre­vi­ously warn­ing it could put pres­sure on the or­gan­i­sa­tion.

‘‘Peo­ple were work­ing at 11pm at night, to the early hours of the morn­ing to meet dead­lines. Those are the pres­sures that staff have to face from time to time. We are well versed in do­ing ma­jor projects to very tight time­lines.’’

Some be­lieve the Gov­ern­ment has al­ready made up its mind that mo­torists are be­ing ‘‘fleeced’’ – Prime Min­is­ter Jacinda Ardern’s term – on fuel prices.

‘‘I’d have to say in my 10 years here we have never been on the end of any kind of po­lit­i­cal in­ter­fer­ence or per­sua­sion,’’ Berry says. ‘‘Our in­de­pen­dence is prop­erly and truly re­spected. We are an in­de­pen­dent, quasi-ju­di­cial body. We act with com­plete in­de­pen­dence and ob­jec­tiv­ity . . . we won’t be swayed by any kind of ex­ter­nal com­ments.’’

The ex­panded pow­ers have height­ened pub­lic ex­pec­ta­tion about fu­ture probes. The su­per­mar­ket du­op­oly, re­gional air­fares, and the bank­ing sec­tor have all been mooted as po­ten­tial tar­gets. Don’t hold your breath.

‘‘The re­al­ity is we have got fund­ing for one mar­ket study – $1.5m, which over 12 months will ad­e­quately re­source a thor­ough mar­ket study,’’ Berry says. ‘‘The pub­lic may have a hope that we will iden­tify is­sues, and that our stud­ies will re­sult in goods be­ing priced more com­pet­i­tively . . . It is not go­ing to be just that easy.

‘‘Each of th­ese mar­ket stud­ies will be com­plex and till you have done them you don’t know what the out­come will be or if there is any kind of res­o­lu­tion to the prob­lems.’’

He does sin­gle out the con­struc­tion sec­tor. ‘‘The one that has prob­a­bly had the most call for it is the cost of build­ing ma­te­ri­als . . . it would have to be a very tar­geted part of that in­dus­try.’’

He’s also got con­cerns about air­port prof­its. While the watch­dog can re­view profit ex­pec­ta­tions, it has no teeth to curb price goug­ing. ‘‘We do, from time to time, look into the con­duct of var­i­ous ports and air­port au­thor­i­ties and, be­cause they are so small, the costs out­weigh the ben­e­fits of re­ally look­ing into it closely.

‘‘But it is a New Zealand Inc is­sue and might be some­thing that could be thought about for a mar­ket study.’’

Re­cently, the com­mis­sion has re­peat­edly hit the head­lines for knock­ing back large cor­po­rate deals. It de­clined merg­ers be­tween Sky TV and Voda­fone, me­dia com­pa­nies Stuff and NZME, in­sur­ance com­pa­nies Sun­corp and Tower, and auc­tion com­pany Trade Me’s takeover of Mo­tor­central.

The mo­nop­oly watch­dog has at­tracted a size­able amount of crit­i­cism. Berry, who has for­mer Fair Go pre­sen­ter Gor­don Har­court as his me­dia ad­viser, is un­trou­bled.

‘‘We are of­ten ac­cused by par­ties who are dis­sat­is­fied with out­comes. It’s not an un­nat­u­ral thing for them to say that we don’t un­der­stand their busi­ness – that comes with the ter­ri­tory – but there is al­ways two sides to th­ese cases. You’ll speak to oth­ers in busi­ness who are very happy with the de­ci­sion. We are stuck in the mid­dle of it.

‘‘If you take the Voda­fone-Sky case . . . Spark was an ac­tive op­po­nent and I ex­pect they thought we un­der­stood the mar­ket well.’’

He be­lieves the in­sur­ance de­ci­sion was a win for con­sumers. ‘‘If we had al­lowed that merger to go through then for in­sur­ance of con­tents, cars, you would only have had the choice of two in­sur­ance com­pa­nies. By keep­ing Tower there as an in­de­pen­dent com­peti­tor, it is good for con­sumers in the long term.’’

The com­mis­sion is now go­ing af­ter truck shops that sell door to door in New Zealand’s poor­est com­mu­ni­ties, charg­ing high prices, and de­fault fees for missed or can­celled pay­ments.

Berry is as level and mea­sured as any pow­er­ful lawyer. He doesn’t emote or show frus­tra­tion. But he does show a rare flash of dis­plea­sure for those who prey on vul­ner­a­ble com­mu­ni­ties, such as South Auck­land.

‘‘We are re­lent­lessly pur­su­ing the truck shops, stand­ing up for peo­ple who have the ba­sic ne­ces­si­ties of life re­pos­sessed, like heaters and other things, which law­fully can­not be done.

‘‘We are re­ally tak­ing steps to en­force re­spon­si­ble lend­ing laws to stand up for con­sumer rights where peo­ple are in the debt spi­ral. They are led into ex­ces­sively high op­pres­sive loans for ev­ery­day goods.’’

Dodgy on­line re­tail­ers are also in the com­mis­sion’s sights. And af­ter a del­uge of com­plaints, it’s also sue­ing Switzer­land-based ticket re­sale web­site Vi­a­gogo.

When the 61-year-old packs up his desk in May, will Berry leave the New Zealand econ­omy a fairer place?

‘‘New Zealand is al­ways is go­ing to have the prob­lem of be­ing re­mote and small. Our scales of pro­duc­tion are small, and much of the com­pe­ti­tion is driven by im­port com­pe­ti­tion, and who is tak­ing mar­gins where, in terms of im­ported goods, may of­ten ex­plain the price dif­fer­en­tial.

‘‘Those fac­tors do func­tion in the way that goods are priced and what we as New Zealand con­sumers face.’’

‘‘We are of­ten ac­cused by par­ties who are dis­sat­is­fied with out­comes . . . but there is al­ways two sides to th­ese cases.’’

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