On 14 October 2011 the Commerce (Cartels and Other Matters) Amendment Bill was introduced into the New Zealand Parliament.  The Bill proposes that ‘hard core’ cartel activity (including price fixing, output restrictions, market allocation and bid rigging) will become a criminal offence subject to a maximum jail term of 7 years for individuals.  However, the Bill proposes to delay the imposition of criminal sanctions for two years.

The introduction of criminal sanctions for cartel conduct will bring New Zealand into line with Australia and other jurisdictions, however the Bill does not mirror Australia’s cartel provisions exactly.

The Bill proposes a “collaborative activity” exemption to replace the current narrower exemption for joint ventures; a repeal of exclusionary provisions; a defence for defendants who “honestly believed” that one of the exemptions applied; an exemption for vertical supply arrangements; and the introduction of an intention, rather than a knowledge element, for the proposed criminal offence.

The Bill will be referred for public consultation and is commentators expect it to be law within the next year.