Competition weakest among banks, insurers and power companies, ComCom reports

Wednesday, 13 May 2026

Banks, insurers, power companies, and retailers demonstrate the greatest power to maintain their prices and margins, a competition report by the Commerce Commission reveals.

The commission’s State of Competition in New Zealand report was published on Tuesday covering a 22-year period ending in 2023.

It showed a modest decline over the period in the concentration of industries, with the largest companies controlling slightly less of the industries in which they operated.

However, there was a lack of “dynamism” in the economy, the commission reported.

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Companies entering the market were now more likely to survive their first few years, but they were also more also likely to remain small, doing little to disrupt their much larger rivals.

Commission chair John Small said: “The report finds that while business concentration has reduced on average, competitive pressure has weakened in many parts of the economy.”

Competitive pressures appeared weakest in some essential industries that households could not avoid, including banks, insurers, and power companies.

Those are industries where the large incumbents insist competition is fierce.

During Parliament’s select committee banking inquiry in 2025 and 2026, big bank chief executives all told MPs that competition among banks was fierce.

The supermarket sector, which has for decades been dominated by the Foodstuffs and Woolworths duopoly, also insists it is fiercely competitive. But the report does not name check supermarkets.

However, not all MPs have convinced all MPs. Last week, NZ First MP Shane Jones said the highest priority on the party’s next coalition negotiation wish-list was breaking up the “gentailer” power companies.

The commission reported many “upstream” industries, whose pricing affected prices throughout supply chains like electricity, gas, water and waste services, banking and insurance, demonstrated signs of weak competition.

“These upstream industries are critical for our 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,” Small said.

The most competitive markets appeared to be those where there were very many smaller operators like the rental market, recruitment and real estate services.

However, average margins across the economy had been roughly stable for the past two decades, the commission reported.

Small said the decline in dynamism indicated a decrease in competition.

“This suggests that market conditions are favouring larger incumbent businesses and, while smaller, newer businesses may be able to enter markets, it is harder for them to displace the established players,” he said.

Weaker competition and dynamism resulted in lower productivity, and lower-quality services.

Small said its findings on competition, concentration and dynamism aligned with international trends.

The OECD had seen evidence of weakening competition across many advanced economies since 2000.

The commission published the report in advance of its Competition Matters conference on Thursday in Auckland where it will lay out its agenda for regulating industries.

Small said: “This gives us the clearest view yet of how competition is working across the economy and provides a positive foundation to build on.”