Foodstuffs win a huge victory on behalf of all Monopolies in NZ. They will now wage total war on customers. Down-right anti-competitive behavior is rewarded by imposing just tiny fines.

Many years ago a chap from a well-known business family in NZ told me that he'd found out what the person was making who owned the franchise for the local supermarket not far from where I live. It was in the millions per annum. That's just one store. Franchise owners have been keeping their heads down in Kiwi society since the amount of money they've been making has been embarrassing, even to them. Down in Westhaven Marina in Auckland, I have it on good authority that a bunch of the biggest boats are owned by supermarket franchise owners. Why should we care? I'm totally cool with people making lots of money when they have worked hard and furthered society with productivity enhancing innovations. Who would begrudge Peter Beck of Rocket Lab his fortune? But folks making money out of owning a duopoly supplier of essential food items? Give us a break. The High Court judgement this week touted by the Commerce Commission as a great success (it fined Foodstuffs North Island $3.25 million for imposing anti-competitive land covenants to block competition) was quite the opposite. It will have the company & franchise owners laughing all the way to the bank. There are over 300 Foodstuffs stores in the North Island, so that represents around $10,000 per store. Golly Gee Whiz. That's not enough to stock the fridge on one of their boats. Has the government gone mad? Has the Commerce Commission gone mad? Has the Wellington judge gone mad? Do they have any idea of what a joke fine has been imposed? The judgement sends a message to everyone contemplating creating a monopoly in NZ - go for it. The worst that can happen is you get caught, in which case you pay a fine representing an inconsequential amount of the money you have made.

Sources:

https://www.msn.com/en-nz/news/other/foodstuffs-north-island-fined-325m-for-anti-competitive-land-covenants/ar-AA1oqjIC

Hang on Nat. Party Pollster Farrar. Ngāi Tahu's receipt of funds from Meridien is not "Greenmail" or "Rent-seeking". Its an efficient Coasian Bargain loved by the free market Chicago School.

The right-wing in NZ should refrain from twisting facts when it comes to patronizing lines explaining to voters how economics works. Especially when it comes to putting down iwi like Ngāi Tahu, labelling them as engaging in dirty play, like "green mail" & "rent- seeking". Specifically, National Party pollster David Farrar says:

Meridian Energy is not revealing the amount it paid Ngāi Tahu as it seeks to renew resource consents for its Waitaki Hydro Power Scheme [in the South Island] .. This is what some call Greenmail. Renewing consents for a critical energy supply should be easy .. But the RMA isn’t .. you have to buy off potential objectors .. Iwi have the power to do major financial damage to a company like Meredian. [Iwi] can use objections .. to extract environmental and financial concessions. The incentive is not new and economists call it ‘rent seeking’.

My impression from looking at this deal is that it is not "rent seeking", nor "green mail". Quite the opposite. Nobel Laureate Ronald Coase wrote one of the most famous papers in economics many years ago called, "The Problem of Social Choice". He argued that the problem of externalities (for example where one party causes environmental damage that hurts another party without bearing the cost) can be solved by a private bargain. Let's say your neighbor lights a fire to burn rubbish that causes smoke to come over your place. If the amount it hurts you can be quantified as $100, you can offer your neighbor $80 to not light the fire & take the rubbish to the tip instead. If the cost of going to the tip for the neighbor is $50, then they profit by $30 from this deal. Meanwhile you make $20 due to there being no more smoke coming onto your place. Its an efficient, welfare enhancing bargain. So why shouldn't Meridien Energy pay Ngāi Tahu (as well as Central South Island Fish & Game, with whom Meridien also struck a bargain) for the externalities that it is imposing on these parties? For National's Pollster to argue that, "The fast-track approach is at best a short-term fix. It helps big business like Meridian .." is revealing. Does National really want to be the party of "big business"? Does it really want to stand against efficient Coasian bargains? Making such bargains easier and quicker to strike is the solution, not stopping them.