The husband-and-wife owners of the Old Mountaineers’ Cafe in Mount Cook Village and a hotel giant have been at loggerheads for several years over allegations The Hermitage hotel was trying to squeeze out potential rivals.

The Commerce Commission said yesterday it had reached a settlement with hotel owner, Aoraki Mount Cook Alpine Village Ltd, after finding the company had breached the Commerce Act.

The commission found the hotel had taken advantage of its “substantial market power” in the village to prevent other businesses or potential businesses from competing with it by locking guests into having dinner at one of its own restaurants.

The settlement ends the long-running fight by cafe owners and mountaineers Charlie and Mary Hobbs, who have been trying since 2002 to run a profitable business in the village, which has been dominated by The Hermitage for over 100 years.

Mary Hobbs told The Press the settlement was a victory for all small companies operating in the shadow of large corporations.

“All we wanted to do was to provide a special service in a special place for all New Zealanders. It’s been a long, hard fight,” she said.

Soon after the cafe opened, The Hermitage decided to offer its guests dinner, bed and breakfast packages, and by October 2003 it made the deal compulsory. The tie remained in place until April last year, when the commission intervened.

The commission concluded the compulsory tie was intended to substantially lessen competition in the dinner market in Mount Cook Village. It also found the hotel had taken unfair advantage of its position.

Under the settlement released yesterday, the hotel company has admitted it breached the Commerce Act and agreed not to reinstate the dinner-accommodation ties.

Hotel general manager Dennis Callesen said the tie-in was never intended to lessen competition but to help the hotel manage demand at its restaurants.

The situation arose when the hotel built a new wing, resulting in more guests wanting dinner at the same time. In response to this, the hotel started offering the packages.

It was a coincidence the cafe had opened at the same time, Callesen said.

“Our competitor … would disagree with that. I know what the facts are,” he said.

“As with most isolated properties, all meals were inclusive and that’s where we had a problem.”

The bulk of the hotel’s customers were from the northern hemisphere, where such deals were common and guests expected to dine at their accommodation, he said.

Callesen said he was relaxed about the settlement, which carried no financial penalty.

Since it dropped the compulsory tie-in, only a fraction of guests had opted to stay at the hotel on a room-only basis, he said.

Charlie and Mary Hobbs plan to spend today celebrating but have made a series of complaints to the Office of the Ombudsmen accusing the Department of Conservation (DOC) of creating an unfairly favourable environment for the hotel at the expense of other businesses in the village.

DOC is the the primary landlord in the village, which is part of Aoraki Mount Cook National Park.

DOC Mount Cook area manager Ross Campbell said the department was preparing responses for the Ombudsmen, but supported competition within the village.

“It gives a choice for visitors. It’s good for the village to have a range of providers,” he said.

Information from: www.stuff.co.nz

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