Federated Farmers have submitted a formal complaint to the Commerce Commission, requesting an urgent investigation into the lending practices of New Zealand banks.

The complaint relates to potentially anti-competitive, coordinated, cartel-like behaviour from the banks, driven by their involvement in the international Net-Zero Banking Alliance.

"In New Zealand five major banks dominate 97.3% of the agricultural lending market," Federated Farmers banking spokesperson Richard McIntyre says.

"All five of those banks are either directly members of the Net-Zero Banking Alliance, or are indirectly affiliated through their parent companies: BNZ, ANZ, ASB, Westpac, and Rabobank.

"This raises some serious questions about the potential alignment of lending policies and anti-competitive cartel-like behaviour that we think deserve further scrutiny."

BNZ is a direct member of the Net-Zero Banking Alliance, having joined in 2021. Westpac, ANZ, ASB, and Rabobank are all affiliated with the alliance through their offshore parent companies.

The banks reference their Net-Zero Banking Alliance obligations in their various sustainability reports and internal banking policies for who they will, or won’t, provide lending to.

Several of the banks have already started to put in place targets for various sectors, including reductions in financed agricultural emissions by 2030.

"Increasingly, we are seeing banks asking farmers about their on-farm emissions and setting 2030 emissions reduction targets that look remarkably similar," McIntyre says.

"Federated Farmers aren’t opposed to individual companies setting emission reduction targets, but we do have an issue with companies potentially coordinating their targets in an anti-competitive way.

"We’re also increasingly concerned about what will happen to farmers if we’re unable to meet the banks’ emission reduction targets by 2030. Will we effectively be de-banked?

"Given the significance of farming and agricultural exports to the economy, this should be something that concerns all New Zealanders."

Earlier today, Federated Farmers sounded the alarm about the risk of banks defunding petrol stations by 2030 as part of their commitment to the Net-Zero Banking Alliance.

Documentation provided to Federated Farmers clearly shows an internal BNZ policy that there is to be no new lending to petrol stations - and all existing debt needs to be paid back by 2030.

"We’re worried we might see something similar happen with farming. It’s a huge concern because, without access to capital, we simply can’t farm," McIntyre says.

"For the avoidance of doubt, Federated Farmers are not definitively saying that banks are operating in an anti-competitive cartel-like way that falls foul of the law.

"What we are saying is that it sure does look like they are, and we need the Commerce Commission to urgently investigate to give us some answers.

"The old saying goes that if it looks like a duck, walks like a duck, and quacks like a duck - then it’s probably a duck. I think the same thing could be said about cartel-like behaviour."

Federated Farmers’ full complaint to the Commerce Commission can be found here:

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