The Commerce Commission's baseline research report examined 22 years of business data from 2001 to 2023 and found that economy-wide competition trends are mixed, with some measures pointing in opposite directions.
The report found that business entry and exit rates have declined, while large companies are better able to maintain their positions. New entrants are capturing smaller shares and struggling to expand after entering the market.
Conversely, large businesses now control a slightly smaller share of the market, indicating improved competition. However, fewer new businesses are entering to challenge them. Commerce Commission chair Dr John Small emphasised that these upstream industries are critical to the New Zealand economy.
"Weak competition in these markets can mean higher costs and lower-quality services cascade through to businesses and households, increasing the prices people pay for everyday goods and services," he said.
"That’s why work already underway to promote stronger regulatory settings and more effective competition is so important."
Dr Small stated the report highlights strengths in some industries; however, it underscores the need to support smaller and newer businesses.
The findings align with OECD evidence of weakening competition in advanced economies since 2000 and reflect domestic challenges, such as low productivity.
"When competition weakens, innovation slows, costs rise, and consumers pay the price. A competitive environment enabling small businesses to grow is essential for productivity and long-term growth," he said.
"Competition agencies around the world are increasingly balancing law enforcement with more active tools, including access, inter-operability and non-discrimination requirements."
"This reflects a broader shift in how competition policy is applied in practice, including in response to the challenges of digital innovation and more complex markets."
This report will serve as a baseline for future monitoring and will be updated as new data becomes available.
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