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Graphic: An Encyclopaedia of New Zealand 1966.


This information was published in 1966 in An Encyclopaedia of New Zealand, edited by A. H. McLintock. It has not been corrected and will not be updated.

Up-to-date information can be found elsewhere in Te Ara.



The keynote of the New Zealand economy is expansion – of farm and factory production, of domestic and export markets, and of the distributive and service facilities that accompany a developing economy. Consistent with this growth is the need for freedom of competition to encourage efficiency in production and distribution, and to ensure that producers and distributors do not charge unfair prices.

The first significant legislation in this field, the Monopolies Prevention Act of 1908, applied to agricultural implements, flour, wheat, and potatoes. This was followed by the Commercial Trusts Act of 1910 which embraced a wider range of commodities, including all foodstuffs, and made it an offence to refuse illegally to deal in these goods or to create monopolies contrary to the public interest. It also made illegal certain exclusive dealing arrangements and provided for the control of commercial trusts.

The Trade Practices Act was passed in 1958 with the object of preventing trade practices deemed contrary to the public interest. This Act established the Trade Practices and Prices Commission, comprising a chairman and at least one other member. Provision has also been made for the appointment of an Examiner of Trade Practices and Prices – an officer of the Department of Industries and Commerce – whose duty it would be to investigate, either on complaints made to him or on his own initiative, trade practices which appeared to be contrary to the public interest.

If, after making an investigation, the examiner forms the opinion that a trade practice contrary to the public interest is being carried on, he is required to report to the Commission which then holds an inquiry, usually in public, to consider the matter. The Commission comes to a decision on the basis of the submissions and evidence presented to it at the inquiry, and if it finds that a trade practice contrary to the public interest is in operation, it may make an order requiring the practice to be discontinued or suitably modified. The parties affected by such an order have a right of appeal to the Trade Practices Appeal Authority. After holding an inquiry, the Commission may also, in cases where it considers such a course would be appropriate, recommend to the Minister of Industries and Commerce the re-imposition of price control concerning any goods and services covered by the trade practice in question.

Section 19 of the Act specifies 16 broad classes of trade practices which may be the subject of orders by the Commission. Amongst the principal types of trade practices involved are collective pricing agreements, ring tendering arrangements, individual resale price maintenance schemes, and agreements between traders to restrict the number of resale outlets for their products. Another type of trade practice, for which the Act makes provision, is the unjustifiable refusal by a wholesaler to sell or supply goods to a retailer.

Section 20 states that a trade practice shall be deemed contrary to the public interest if, in the opinion of the Commission, it unreasonably increases costs of manufacture or distribution, selling prices, or profits – or if it unreasonably reduces competition, or prevents or limits the supply of goods to consumers.

During the period 1958–65 the Commission held 23 public inquiries and issued 29 orders. The majority of these inquiries dealt with collective pricing arrangements covering a wide range of commodities and services. Two of the cases concerned refusals by trade associations to admit firms as members, and two more related to the refusal by wholesalers to supply goods to retailers. A restrictive tendering arrangement for building work was also involved, and there was an inquiry into a restrictive agency agreement between certain shipping companies and their booking agents. In five of these cases the Commission made no order, because it had not been proven to its satisfaction that trade practices contrary to the public interest were in operation or because the parties had of their own volition abandoned the offending trade practices or had agreed to modify them suitably.

Appeals were successful against orders of the Commission dealing with the pricing of imported books, the issue of price lists by two district associations of master grocers, the shipping companies' agreement with booking agents, and the refusal by a manufacturer to supply proprietary drugs to a wholesaler.

In the First World War and in the immediate post-war years inflationary conditions developed which led to considerable price increases, and attempts were made to restrain price increases by conducting a number of prosecutions under the profiteering sections of the Board of Trade Act of 1919. As soon as the Second World War broke out, price stabilisation was established as Government policy and administrative machinery was set up for dealing with any increases found to be necessary beyond basic levels. These wartime regulations were later replaced by permanent legislation under the Control of Prices Act of 1947. Authority to decide which goods and services shall be subject to price control under the Act is in the hands of the Minister of Industries and Commerce. Prices for goods and services subject to control are determined by the Price Tribunal or the Secretary of Industries and Commerce or officers of the Prices Division of the Department acting under delegation from the Price Tribunal. The extent of control has fluctuated from time to time to meet changing circumstances. Control continues today over a range of items where competition is not sufficiently free to operate as an effective regulator of prices or where the goods concerned are subject to the payment of subsidy by Government.

The limits for decontrol were suggested to Government by the Price Tribunal in 1954, when it listed the conditions and circumstances under which it considered retention of control of the prices of goods and services was necessary:

  1. Shortage of goods and services

  2. Free competition impeded by such circumstances as:

    1. Exchange control, import control, tariffs.

    2. Licensing.

    3. Monopoly or quasi monopoly.

    4. Restrictive trade practices.

    5. Restrictions on capital issues or credit control.

    6. Space and premises limitations.

  3. Government subsidies paid for the purpose of reducing prices to consumers.

  4. Unfair prices charged for goods and services not subject to price fixation.

by Geoffrey Leonard Easterbrook Smith, B.COM., Director, Development Division, Department of Industries and Commerce, Wellington and Peter Marcus Wilson, B.A., Advisory Officer, Department of Industries and Commerce, Wellington.


Geoffrey Leonard Easterbrook Smith, B.COM., Director, Development Division, Department of Industries and Commerce, Wellington and Peter Marcus Wilson, B.A., Advisory Officer, Department of Industries and Commerce, Wellington.