Labour party in New Zealand says it will crack down on companies and outlaw price gouging by large companies if elected, with a proposed regime targeting excessive pricing for essential goods and services across sectors including food, fuel, power, banking and insurance.
"New Zealanders are working hard, but they’re still going backwards. Christopher Luxon promised he’d fix the cost of living, but he’s just made it worse, all while a handful of big companies price gouge households - charging whatever they like for the things families can't do without," Labour Leader Chris Hipkins said.
Under the policy, businesses with substantial market power could face penalties if they charge prices significantly above what would be expected in a competitive market over a sustained period. The rules would also cover cases where powerful companies are found to be paying suppliers unfairly low prices.
The proposed law would apply to major players in sectors including food, electricity, fuel, transport, telecommunications, banking and insurance.
Labour said the Commerce Commission would be given powers to investigate suspected price gouging, while consumer and supplier representatives would also be supported to pursue cases.
Businesses found to have breached the rules could be required to pay penalties and return "every dollar of excess profit".
The test would focus on companies holding sufficient market power that consumers "can't realistically switch" to another provider, or where barriers make it difficult for new competitors to enter the market.
"Right now, a company big enough to dodge competition can charge excessive prices for the basics, like food and fuel, and there's no law against it," the Labour leader said.
Labour Commerce and Consumer Affairs spokesperson Arena Williams said the proposed rules were intended to apply to large companies rather than smaller operators.
“This is aimed at a small number of very large companies. It won't touch the 97% of New Zealand businesses that are small, like your local dairy or cafe.
"Rules like these already operate in the United Kingdom, Europe, Canada, and Australia. It's time New Zealanders had the same protection."
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