Consultation opens on anti-competitive land agreements

This review will focus particularly on whether land agreements are being used in a way that make it harder for new businesses to enter a market, or for existing businesses to expand. It will also help the government understand the benefits of land agreements for businesses and the wider economy, ensuring this is balanced against any potential harm.

In December 2022, the Commerce Commission (the Commission) released its final report for the residential building supplies market study. It recommended that the Government undertake a review into the use of land agreements across the economy to assess whether a multi-sector solution is needed to address their impacts on competition.

The Commission identified in all 3 of its market studies looking at competition into retail fuel, retail groceries and residential building supplies, that the use of land covenants and similar agreements are potentially restricting competition.

Competition between businesses is a key driver for increasing value, innovation and productivity and therefore better outcomes for New Zealanders. When businesses compete, they are incentivised to keep prices of goods and services down while ensuring quality remains high. Competition also helps businesses innovate to improve the range of goods and services on offer. 

The Government has taken action to address concerns raised in the groceries sector. In response to the Commerce Commission’s market study into the retail grocery sector, in June 2022, Parliament passed the Commerce (Grocery Sector Covenants) Amendment Act. This new law bans restrictive land covenants and exclusive covenants in leases used by major grocery retailers to stop the development of land, or the use of a site, by a competing retailer.

Interested parties are encouraged to provide feedback to help inform the review into anti-competitive land agreements across the economy.

The consultation is open for 6 weeks, closing on 25 August 2023. Further information is available on MBIE’s webpage.

Have your say: Review of anti-competitive land agreements