Proposal to restrict the sale of refrigerants

Press Release – Commerce Commission

The Commerce Commission has reached a preliminary view that the Refrigerant License Trust Board’s proposal to restrict sales of refrigerants to trained and certified people is not likely to lessen competition in any market.
Commission reaches preliminary view to authorise a proposal to restrict the sale of refrigerants
The Commerce Commission has reached a preliminary view that the Refrigerant License Trust Board’s proposal to restrict sales of refrigerants to trained and certified people is not likely to lessen competition in any market.

The Commission today published its draft determination on the application for authorisation made under section 58 of the Commerce Act.

The Refrigerant License Trust Board is seeking authorisation for wholesalers of refrigerants to enter into a voluntary agreement. This agreement would result in the wholesalers who participate only selling refrigerants to those customers trained to safely handle them.

Dr Mark Berry, Commerce Commission Chair said, “The Commission’s preliminary view is that the proposed arrangement will have little impact on the competitive environment, given that participation will be voluntary.”

The Commission reached the preliminary view that the proposed arrangement would contain an exclusionary provision that has the potential to breach the Commerce Act. However, the exclusionary provision is likely to lead to a public benefit that outweighs any detriment.
The relevant markets for the purpose of the Commission’s analysis are those for the importation and wholesale supply of all refrigerants, the supply and installation of refrigeration and air conditioning systems, and the service and maintenance of refrigeration and air conditioning systems.

The Commission is seeking submissions on its draft determination by 14 October 2011. Submissions will be posted on the Commission’s website. The Commission intends to release a final determination on the proposal by late October 2011.

You can view the draft determination on the Commission’s website at: www.comcom.govt.nz/anti-competitive-practices-authorisations-register

Background

The Refrigerant License Trust Board is a charitable trust which has the purpose of promoting, educating, and training people in the safe handling of refrigerants.

What is an application for a restricted trade practice authorisation?
Under section 61 of the Commerce Act, the Commission can grant authorisation for a practice that may, in the applicant’s view, breach the restrictive trade practice provisions of the Commerce Act.

In this case, the applicant considered that the agreement might substantially lessen competition in a market and might contain a provision excluding the supply of refrigerants to those parties who were not properly trained or certified (termed an exclusionary provision).

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