Cruiseboat titans fighting over rights at Milford Sound Piopiotahi have complained to the Commerce Commission.
Jucy co-founder and owner of cruise operator Pure Milford Chris Alpe has joined forces with rival Cruise Milford, part-owned by fellow rich-lister Stephen Lockwood, to complain about a company owned by two other competitor cruise operators.
The company, Milford Sound Tourism Ltd, runs the port and is 98% owned by Real Group and rich-lister David Skeggs’ Skeggs Group, who operate eight of the port’s boats under brands Real NZ and Southern Discoveries.
Last month, the Otago Daily Times reported that other heavyweight Milford tourism operators had complained about Milford Sound Tourism not revealing dividends it pays Real Group and Skeggs. The company raises millions from a levy it charges to all passengers boarding all cruise boats plus charging rents for use of the port by cruise operators.
Mr Alpe said Pure Milford, Cruise Milford and two other cruise operators that use the port were "treated as second-class citizens by a landlord that is our competitors".
Pure Milford and Cruise Milford used high-flying barrister Mai Chen to complain to the commission that Milford Sound Tourism had under-invested in decaying infrastructure and kept the lion’s share of port space for their shareholders’ businesses.
The ODT has previously reported complaints by other tourism operators that Milford Sound Tourism is not public-owned and does not say how much profit has gone to its shareholders.
In a response to the ODT, the commission said that, following an assessment of the issues raised, it had decided to defer decision making to Conservation Minister Tama Potaka, who is currently reviewing Milford Sound Tourism’s rights to run the port.
A commission spokesperson said "any competition concerns arising from the matter are most appropriately addressed through the minister of conservation’s ongoing consideration of Milford Sound Tourism’s concession and intend to engage with that process".
Milford Sound Tourism, which changed its name in 2016 from Milford Sound Development Authority, was consented by the Department of Conservation to run the port in Milford Sound’s Freshwater Basin in Fiordland National Park from 1990 to 2020 and then offered a consent until 2028, but the company complained, saying it had expected a second 30-year term, until 2050.
Mr Potaka said he was waiting for information from Doc, expected end of this month, and it was a "complex matter requiring appropriate consideration".
Milford Sound Tourism raised the cruise passenger levy from $10 in 2023 to $15. Only $4 of it goes to Doc, an amount that has not changed, meaning the amount raised for Milford Sound Tourism has gone up from $6 to $11, an 83% increase. The hike means levies of $8.8 million could go to the company this year if 800,000 tourists board cruiseboats, but some cruise operators have refused to pay increases.
Mr Alpe said he did not care that Milford Sound Tourism was privately owned or profitable "as long as profits are derived after investment in infrastructure and subject to operators being given equal rights".
"We have two large boats, very little access to infrastructure and a very small retail shop compared with the size of our operation. Everything favours the two main shareholders, which is not right.
"I don’t mind who owns it, but what I do object to is being treated as second-class citizens by a landlord that is our competitors.
"There is a great deal of arrogance."
One source described Milford Sound Tourism’s actions as seeking competitors’ deaths by "a thousand cuts".
Mr Alpe suggested the company could be sold to a third party, the government buy it back, or the port could be run collectively as a "sub-structure ... that anyone could buy into, that leases infrastructure off the shareholders".
Five of the six directors of Milford Sound Tourism have Real or Skeggs connections, including Real NZ’s chief executive Dave Beeche, Southern Discoveries’ chief executive Kerry Walker and Skeggs Group owner David Skeggs. Southland District Council’s chief executive Cameron McIntosh holds the board’s sixth seat because the council has a token 2% of the company’s shares.
The issue of concession length is a Milford hot topic.
Mark Quickfall, owner of Mitre Peak Cruises, one of the other four boat operators, is chairman of Destination Milford Sound (DMS), a trade body representing all Milford tourism operators, including Milford Sound Tourism, many clamouring for Doc to renew their concessions.
Mr Quickfall says concession decisions would lead towards infrastructure upgrades.
He welcomed recently-closed Doc consultations about improving conservation land management as an opportunity to achieve a "sound policy environment, collaborative governance and local industry involvement to deliver quality, safe and sustainable visitor experiences in Milford Sound Piopiotahi".
Milford’s problems were complex and the "transition of the Milford Sound Development Authority to be a company using levies to pay dividends has added to this complexity".
A non-profit authority collecting levies to develop and maintain infrastructure "remains a promising option that could lead to significant improvements".
Responding to the commission decision to engage with Mr Potaka, Milford Sound Tourism’s chairman Roger Wilson said the company was "supportive of this continued dialogue and look forward to collaborating closely to ensure all aspects of our concession are thoroughly addressed and understood".
He said Real and Skeggs had long-term rights to occupy space and rents charged to other cruise companies were reasonable, the passenger levy had remained $10 between 2018 and 2023 and half its increase was due to inflation. He expected refusal to pay levy increases to "resolve itself" now.
Mr Wilson previously said the company had a right to dividends, was undertaking maintenance and covering rising operating costs including its staff, and could not invest in major infrastructure upgrades due to concession uncertainty. A longer concession would unlock $50m expenditure on upgrades to the terminal, parking and waste-water plants.
The company had spent $12m on the port in 1992, $8m extending it in 2012 and a further $12m on "asset improvements".
It was helped initially by a $2.25m government grant, loan guarantees and tax exemptions while operating under its previous name.
Smaller boat operators have never used the port.
Brian Humphrey, former co-owner of Breaksea Girl which has sailed Fiordland for decades, said he had to moor in the fiord because there was no chance of space, or affording fees, at Freshwater.
Clients had to go to a ramp at Deepwater and be ferried to Breaksea Girl on a small boat.
"It’s just ridiculous. The boat is iconic to Fiordland and you have to get your feet wet to access it."
