In April 1999 the New Zealand government's Commerce Commission rejected the agreement for Waste Management Inc, WMI, Waste Management of New Zealand to buy Waste Care. The major reason given, according to The Dominion newspaper, would be the dominance of WMI in the Auckland area, one of two major metropolitan areas in the country. The decision was based on the perception that there would be no competition when EnviroWaste Services' two Rosedale and Greenmount landfills closed in 2003. The commission determined that there may be competition in the future but that "it would be neither likely nor sufficiently timely to constrain the combined entity of Waste Care and Waste Management's Redvale and Whitford landfills." The Dominion did not report if the Commerce Commission ruled on the issue of WMI's good character as required in New Zealand's Section 7(1) of the Immigration Act of 1987. Reuters reported, before the decision on a commission statement that WM NZ and Waste Care Limited were two of the largest waste management companies in New Zealand.
Waste Management NZ Ltd claims to be "NZ's largest waste services provider with 17 locations." (Internet Yellow Pages) This move by WMI to become dominant and almost a monopoly in Auckland shows the intent to become monopolistic wherever possible. The WM NZ annual meeting approved the reapplication to the Commerce Commission.
The sale of Waste Care is by SITA S.A., a public company of France, 63% owned by Suez Lyonnaise Des Eaux. SITA recently had bought Waste Care in March 1998 along with all the other BFI international operations, except in Canada and Mexico.
The denial of the Waste Management takeover of Waste Care comes soon after announcement by the government of their intention to strengthen the Commerce Act. The new act will increase penalties for price fixing. "Anti-competitive behavior cannot be tolerated in New Zealand," said Enterprise and Commerce Minister Max Bradford. Anti-competitive offences will be widened to include output limitation and market allocation agreements. Market allocation regulations could effect WMI since it has been convicted many times for illegal dividing segments of a market. With reduced competition among waste management firms, such anti-competitive agreements are liable to become common in New Zealand. The present act cannot stop mergers that are likely to promote cartels and other collusive behavior.
Penalties will also be increased, in hope of deterring large firms. The current maximum penalty of $5 million is no longer considered by the government to be a sufficient. New penalties will include maximums up to three times the value of the illegal gain or 10 percent of the company's annual turnover. In a parliamentary government executive announcements are likely to pass as announced.
Dated July 3, 1999
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