Complaint over publisher's sale to NZX

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Max Bowden, publisher and editor-in-chief of Trans Tasman, The Main Report and an agricultural newsletter, has complained to the Commerce Commission about NZX's acquisition of farming publisher Country-Wide, saying he believes it breaches the Commerce and Fair Trading Acts.

Mr Bowden said he was deeply concerned that NZX was trying to act both as a regulator and a player in the rural publishing market, promoting its own propaganda as it extends directly into owning media assets.

He has told the commission he believed the acquisition was a conflict of interest.

Adam Fricker, managing editor of another major farming publication, Rural News, was also concerned. "Can the stock exchange operate the market and also operate commercially?" he said. "How does NZX fit with owning a media company?"

Mr Bowden said he was particularly worried about an internal memo sent to staff on Tuesday by NZX business acquisitions manager Rachael Cross.

"The acquisition," Ms Cross said, "will enable us to corner the market as the provider of agri information, news and media on NZ agri sector for farmers and corporates alike".

At issue: whether an organisation calling itself a regulator should be cornering the market in anything, let alone a commercial enterprise, by acting as both a player and the market enforcer.

NZX chief executive Mark Weldon described the criticism as "bonkers". "It is desperate balderdash to suggest there is any conflict of interest," he said.

"I don't think the question is a starter. It sounds like the usual suspects who like to find a sharp knife. It sounds like typical responses from competitors."

Mr Weldon said in his view, NZX had two core businesses: running the trading markets (equity, debt and energy) and clearing and settling those transactions; and acting as a bridge between the information and operating markets.

NZX already owned three online rural publications, Agrifax, Dairy Week and Pro-Farmer, and it made sense to put those things together. It also owned online news service, Newsroom, and had a joint venture with Fairfax Media where Fairfax hosted nzx.com and provided an editorial service on the website.

On Wednesday, NZX announced it was finalising an agreement to buy Country-Wide, publisher of The NZ Farmers Weekly, The NZ Dairy Exporter, and Country-Wide North and Country-Wide South.

The vendors are Feilding's Tony Leggett and Dean Williamson, who would still run the business.

NZX has an additional rural connection in the form of one of its directors, Henry van der Heyden, who is also chairman of Fonterra.

Rural print is a congested market with an estimated 45 titles going to the generalist farming sector. About 87,000 farmers receive the four major publications: The NZ Farmers Weekly, Rural News, Straight Furrow and two Country-Wide magazines.

In her internal memo, Ms Cross said: "The acquisition of CPL will add scale to NZXs existing agricultural and media businesses, and give NZX exposure into the rural sector (farmers) that to date we haven't really been able to achieve with our previous agricultural acquisitions."

Bruce Sheppard, chairman of the Shareholders' Association and a long-time critic of NZX and Mr Weldon, said the exchange needed to explain how, strategically, the Country-Wide acquisition would sit within its existing business model. "It was a significant step to move from content (the Fairfax joint venture) to direct delivery of information to the mass market," he said.

- © Fairfax NZ News