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In the Commerce (Promoting Competition and Other Matters) Amendment Bill, in the new section 36C about predatory pricing, what is the intended meaning, if any, of “pricing below cost”?

Answered Question 4167 (2026)
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Asked by

Arena Williams

Member for Manurewa · Labour Party

Question

  • In the Commerce (Promoting Competition and Other Matters) Amendment Bill, in the new section 36C about predatory pricing, what is the intended meaning, if any, of “pricing below cost”?

Answered by

Hon Scott Simpson

Member for Coromandel · National Party · Minister of Commerce and Consumer Affairs

Answer

The intended meaning is the cost benchmarks set out in proposed section  36C(3). Pricing is “below cost” when a firm prices below Average Variable Cost (AVC) or Average Avoidable Cost (AAC), or (where the conduct has an exclusionary purpose) below Long Run Average Incremental Cost (LRAIC) or Average Total Cost (ATC).