What’s stopping competition in New Zealand?

As New Zealanders grapple with the cost of everyday essentials, from the supermarket checkout to power bills and bank fees, pressure is growing to address weak competition in critical sectors.

Rebalancing Markets: Competition, power, and a fair economy, hosted by Business School research centre Juncture: Dialogues on Inclusive Capitalism, will see experts in regulation, energy, consumer behaviour, law and economics examine why competition remains weak and what could help rebalance the system.

“When people feel that essential markets are stacked against them, trust in the whole economic system begins to weaken,” says Dr Drew Franklin, senior lecturer in marketing and associate director at Juncture.

“Markets are one of the most powerful tools we have for coordinating economic life, but they don’t work well in isolation. They depend on rules that encourage openness, innovation and accountability.” 

The discussion comes as the Commerce Commission’s latest report on the state of competition in New Zealand suggests market conditions favour larger established businesses, making it harder for smaller and newer firms to displace these dominant players. Electricity, gas, water, and waste services, and financial and insurance services were identified as the areas most lacking competitive pressure.

The Commission’s Deputy Chief Executive Raj Krishnan is bringing insights from the competition and consumer watchdog to the panel discussion.

Another panellist, Business School alumnus Tex Edwards, the founder of independent public policy and research group Monopoly Watch, and telecommunications company 2degrees, says the Commerce Commission has clearly identified the country’s competition problems.

“Parliament must now arm the Commission with powers and protect it from lobbyists, so the evidence can be translated into lower prices, more choices, and a fairer economy.” 

Dr Eric Crampton, chief economist at the New Zealand Initiative and adjunct senior fellow at the University of Canterbury, says too often, governments create the market power they later condemn.

“District plans often have rules banning new supermarkets in particular locations, and consenting processes that force entrants to prove they will not compete with established businesses,” he says.

He also points to pharmacy contracting rules, occupational licensing regimes and New Zealand-specific standards as barriers that can limit entry.

“A fair and competitive economy depends on open entry,” says Crampton.
“When markets are open, underperformance by established players becomes an opportunity for entrants and better service for consumers. When entry is blocked by law, regulation, planning, licensing or procurement, market power becomes entrenched.”

Dr John Land, senior barrister at Bankside Chambers and teaching fellow at Auckland Law School, says competition could be improved through increased Commerce Commission powers and by removing barriers to entry and expansion. He says some areas of the competition framework, however, may go too far, particularly around franchise networks and intellectual property rights, with possible impacts on innovation and pro-competitive business conduct.

Professor Jodi Gardner (Auckland Law School) researches how the law responds to issues such as inequality, vulnerability, poverty, and financial exclusion. She will bring a consumer rights perspective to the panel, which will also explore how technology reshapes markets.

Jessica Venning-Bryan, CEO and co-founder of AI-driven energy forecasting and pricing platform Factor, says technology is constantly changing how households participate in the energy system.

“While the cost of solar and battery systems is still prohibitive for most households, affordability is rapidly improving, and we will see much greater uptake of these technologies over the coming decade.

“When households become producers, not just consumers of energy, they have economic leverage. As we reach a critical mass of empowered households, the market will respond with better products and services to attract these prosumers.”