20 Mar 2018

Auckland cruise terminal management may be anti-competitive

6:51 am on 20 March 2018

The council-owned Ports of Auckland company may be engaged in anti-competitive behaviour in the way it runs the city's main cruise ship terminal.

Auckland's main cruise facility is Queens Wharf, with the heritage-building Shed 10 as the terminal.

Auckland's main cruise facility is Queens Wharf, with the heritage-building Shed 10 as the terminal. Photo: Supplied / SnapIT HD

The only local tour operators which the port company allows to set-up in the publicly-owned Shed 10 terminal, are those approved by cruise lines, which also run their own shore excursions.

Ports of Auckland described the arrangement as "normal", with visiting cruise lines not expecting to find competition for their shore excursion programmes inside the terminal.

"I think that there is a competition law question that needs examining here," said Andy Glenie, a director and competition law specialist at Anderson Creagh Lai.

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Andy Glenie Photo: Supplied / ACL

"This is a facility that has some monopoly characteristics, it's a gateway for tourists coming into New Zealand, and often issues can arise in those sorts of situations," he told RNZ.

Ports of Auckland takes full control of Queens Wharf and the Shed 10 terminal, on days when cruise ships visit.

The wharf is jointly-owned by the council and government.

The port company issues all of the security passes for those days, and said it issued them only to those on the "approved" list which is supplied by the cruise line's representative.

The cruise lines run their own programme of shore excursions, and also sell some tours run by local operators whose tours are approved, and who enter commercial deals through the line's ground handler.

All of those tours are sold on board the ship before it reaches Auckland.

One major Auckland operator, Explorer Bus has struck a deal with a cruise line and is the only one able to set up inside the secure area of Shed 10.

It runs a last-chance booking booth before passengers leave the terminal, and can charge their tour back through the ship to their cabin account.

RNZ has a copy of a letter sent by Princess Cruises to passengers who had not yet booked a tour onboard, as the ship approached Auckland.

It shows the value of the deal struck by Explorer Bus.

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Princess Cruises encourages passengers who have not yet booked a tour onboard before arriving in Auckland, to check out a preferred operator. Photo: RNZ

"We thought it could be useful to inform you that right inside the ship terminal, on the ground floor there will be the Hop On-Hop Off bus desk, where you can purchase your tickets by using your cruise card.

"Surely it will be an easy and comfortable way to get around the city, a way to see the main attractions without get(ting) lost," wrote the cruise line.

The arrangement is legitimate business practice. Small local tour operators though argue that those parties should not be allowed by Ports of Auckland to dictate who else can sell in the terminal.

"What we've got here is foreign companies controlling a publicly-owned asset," said Colin Binsted who owns Planet Eco Tours.

"That's an indictment on the operation, it's an indictment on the failure of the council to stand up for Aucklanders and good independent operators," Mr Binsted said.

Ports of Auckland has been open with RNZ in discussing the Shed 10 operation, providing a background briefing with managers.

One told RNZ that the cruise line expects not to have competition in the terminal for its shore excursions.

A group of small tour operators recently met with Ports of Auckland, and the city's council-owned tourism agency ATEED, which withdrew its iSite information and tour booking office from Queens Wharf - leaving them without representation in the area.

Mr Binsted said they asked Ports of Auckland whether the iSite booth could be located inside Shed 10.

"No was the answer - why not? - the cruise ships will not allow it," he said.

ATEED since sold the operation of the tourism iSites, to a private company.

Ports of Auckland has declined formal comment on Shed 10, telling RNZ there is not an issue.

Two competition law specialists have told RNZ that on the face of it, the Shed 10 arrangements could collide with Sections 27, or Section 36 of the Commerce Act, which prohibits anti-competitive behaviour.

Ports of Auckland has likened the running of Shed 10, to the running of Auckland International Airport.

However one of the first tests of the Commerce Act 1986, saw the airport operator the Auckland Regional Authority, unsuccessfully defend refusing a third car rental company to set up in its terminal, having granted exclusive contracts to two others.

RNZ approached other parties in the Shed 10 arrangements, none commented.

The cruise sector umbrella group Cruise New Zealand Association's CEO Kevin O'Sullivan, was out of the country.

NZCA's chair Debbie Summers, who's also a director of ID Tours which packages up shore excursions for cruise lines, declined to comment.

Explorer Bus has not responded to RNZ.

The Commerce Commission said while direct complaints were an important part of its work, it also received information through other avenues, and would consider whether the Shed 10 issue warranted a closer look.