PROJECTS

Review of Market Competition for Livestock Improvement Services, New Zealand

The problem

New Zealand’s Livestock Improvement Corporation (LIC) owns a database on the genetics, productivity and ancestry of almost every cow in New Zealand’s dairy cow herd, going back generations. LIC uses this database to assist its farmer-members with precise guidance on herd-improvement and artificial breeding. Rival companies alleged that LIC’s database gave it a dominant position in the market, and that the fees it charged competing breeding companies for access to the database were deterring competition in the artificial breeding market. The Commerce Commission, New Zealand’s competition authority, was considering enforcement action.

How we helped

Castalia advised that charges for use of the database could only be considered anti-competitive if they infringed the Efficient Component Pricing Rule (ECPR). We calculated what charges for access would be under the ECPR, and found that LIC’s actual charges were lower than those that would be justified under this Rule. We also examined data on the market share of LIC and its rivals in the artificial breeding market, finding that the rivals were gaining market share.

Impact

Castalia’s report concluded that other cattle improvement and artificial breeding companies were being charged less than 75 percent of the ECPR price and had increased their market share. This meant that LIC pricing did not deter competition. The Commerce Commission accepted our conclusion and took no further action.

Our team

Alex Sundakov

Alex Sundakov

Executive Director
David Ehrhardt

David Ehrhardt

Chief Executive

How can we help you?

How can we help you?

WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America

SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia

AUCKLAND
+64 (4) 913 2800
74D France Street, Newton South
New Zealand

WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand

PARIS
+33 (0)1 84 60 02 00
64-66 Rue des Archives
France

BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-127
Colombia

Thinking for a better world.

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WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America

SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia

AUCKLAND
+64 (4) 913 2800
74D France Street, Newton South
New Zealand

WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand

PARIS
+33 (1) 73 44 26 97
6 Rue Duret
France

BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-127
Colombia

Thinking for a better world.

Castalia-logo-negative-2col
PROJECTS        NEWS        BLOG        CONTACT
© Copyright 2019 Castalia. All rights reserved.
Terms | Privacy | Credits | Sitemap