Day in court approaches at last

Hugh Rose holds a reader for NAIT ear tags. He thinks RFID on stock crates is a better tracking solution. Photo / Tania Whyte

The Commerce Commission has laid charges of price-fixing, writes Mike Barrington

A complaint made by Northland farmer Hugh Rose about stock firms allegedly fixing prices prior to the introduction of National Animal Identification Tracing (NAIT) could lead to legal action to recover huge sums of money farmers were overcharged for ear tags and entry into the NAIT system.

Mr Rose and wife Pauline have 42ha at Rukuwai, near Parua Bay, where this season he is running beef cattle and experimenting with watermelons after last year producing a bumper crop of kumara.

Mr Rose - a police officer in the UK before emigrating almost 40 years ago - was listening to National Radio three years ago, when the NAIT Act was put through Parliament, and heard that the major stock companies would ensure compliance was achieved as they would be in a position to be paid for services previously unrequired.

"I mentioned it to the Farmers of New Zealand executive members and laid a complaint with the Commerce Commission," he said.

The commission filed charges in the Auckland High Court three months ago alleging PGG Wrightson, Elders New Zealand and five individuals employed by the two companies breached the Commerce Act by establishing three pricing agreements before NAIT came into force in 2012.

The agreements were made to fix the price of tagging untagged cattle at sale yards; increase yard fee charges; and increase stock and station agent charges by introducing an administration fee for NAIT-related cases.

It is understood a date has not yet been set for the charges to be heard.

Elders' marketing manager Jane Carey said yesterday her company had no comment to make on the allegations at this stage.

PGG Wrightson general manager of strategy and corporate affairs, Julian Daly, said that while the matter remains before the court it would not be appropriate to comment on the proceedings.

"However, we can say PGG Wrightson has co-operated fully with the commission in its investigations," he said. "Since the initiation of the matter we have taken the opportunity to carefully review the events subject to the commission's concerns and have re-evaluated our compliance training processes."

In the meantime, Christchurch lawyer Garry Wakefield is sounding out the possibility of bringing a group representative action against the stock companies if the charges are proved.

"I am interested in recovering the proportion of the fees found to be overcharged to farmers as a result of the agreements between the firms and the parties involved," he said.

Mr Wakefield told the Northern Advocate it appeared the commission was seeking only a percuniary order rather than a compensatory ruling against the stock firms.

The eventual court decision would have to be analysed to see if there was a valid civil claim against any parties found to be involved in price-fixing.

He agreed that although the overcharging of each farmer could be a small amount, the number of farmers involved could push the total overcharged nationally into many thousands of dollars.

Mr Rose was keen for the Commerce Commission to press on with its prosecution of the stock companies, but he was hoping the NAIT system itself was exposed as the "main culprit".

"The NAIT system is designed around batch processing of data which involves multiple entries of information after the event. As a result, inaccuracies are commonplace owing to human and time constraints," Mr Rose said.

A simpler and more accurate system would be achieved with a real time process used by all logistic companies nowadays.

Having radio frequency identification (RFID) antennae on trucking company stock crates would automatically record all cattle movements accurately. "Sadly, that would mean an end to an army of telephonist help staff and all the infrastructure required for the NAIT system," Mr Rose said.