What’s the price tag on a piece of pressed aluminium these days?
I guess it depends if you’re the one buying a new personalised plate for your much-loved car - or the only company in the country legally allowed to sell one.
I've always thought personalised plates a bit of a rip off. Most motorists can barely afford enough petrol to get down their driveway, let alone paying a thousand bucks for a novelty decoration.
It can cost you anywhere from $169 to more than $1400 to buy a new personalised plate - and right up into thousands for some of the more rare ones.
For example - ‘R1POFF’ will run you about $1000, while a remake of your existing government plate with a different colour or design goes for about $169. We just accept that’s what these plates cost.
But many don't seem to realise that the personalised market in New Zealand is a government-commissioned monopoly.
There's only one company allowed by the government to sell these plates, and they have no direct competition.
KiwiPlates took over the job in August 2016, winning NZTA's tender ahead of four other companies.
Bizarrely, NZTA chose just one of the four companies to award the tender to, despite tendering for "one or more" and having the legislative ability to choose more than one to do the job. They opted to keep the system running as a monopoly.
Before KiwiPlates, Personalised Plates NZ held the position for 28 years solid, holding the exclusive contract for an unlimited period, until a law change in 2008 allowed the government to cancel the contract.
Personalised Plates didn't like this, and fought hard to hold on to their position, taking NZTA to court and arguing it was "irrational and unreasonable" to give them a year's notice, suggesting they should have another 10 years at the trough, or that NZTA pay them damages for breach of contract.
I'm unable to find court records or news articles on the outcome, but it appears NZTA eventually found a way to kick them out, several years later. Personalised Plates said "we have been privileged to have this opportunity for the past 28 years, but now it's someone else's turn".
Privileged is right.
NZTA now says they will put out a new tender every five years or so for a new provider. But if they get the same legal challenges each time, who's to say whether that will work out.
Anyway - back to the present. KiwiPlates runs the show now, and they're owned by an enormous French multinational called Publicis Groupe. We're talking billions of Euros in revenue per year and fingers in many pies.
As well as new personalised plates, KiwiPlates also aspires to dominate the second-hand market. When KiwiPlates took over in 2016, managing director Rob Kent told the Herald their long-term goal was to "become the official method of selling second-hand plates".
NZTA doesn't seem too concerned with this market being a one-shop-stop, because they collect levies on all new plate sales which go towards road safety. It's genuinely a worthwhile cause and they do some great work to make the roads safer.
I was curious about how much of a cut NZTA gets from the sales, and how much this monopoly owned by a foreign mega-corp gets.
I asked NZTA how much they made in levies from a year of plate sales - about $3.1 million for the financial year ending June 2017.
Great - that's a lot of funding for road safety initiatives - but this was where it got a bit shady.
NZTA wouldn't tell me exactly what percentage they take from each plate sold by KiwiPlates, saying that information is "commercially sensitive".
Needless to say, I found this a bit rich considering there is literally no commercial competition for KiwiPlates. They are commercially insensitive, in that they have an exclusive government contract to sell the new plates.
NZTA has used the same excuse before when asked through the Official Information Act to provide their pricing and levy structure, and in at least one case simply argued that they don’t have the information because they are not the ones selling the plates.
So I asked NZTA to tell me how many plates were sold since KiwiPlates took over, and they did, giving me 20 months of records from August 2016 until April 2018.
A total of 19,477 plates were sold in that period, but that figure’s for 20 months - average it out for a year and you’re looking at annual sales of about 11,686 plates.
That would mean they sold about 32 plates each day - safe to say they're selling several million dollars worth of plates per year.
I had originally calculated a rough estimate of what KiwiPlates might be making, but general manager Mark Wilson poked holes in my figures while quietly declining to actually tell me how much his operation is making.
"As a commercial entity, there is no obligation for Publicis to disclose revenue, nor the expenses associated with the provision of the service we provide to NZTA," he told me.
"Personalised plates are a discretionary purchase, with consumers having the choice to purchase a personalised plate or display the standard government issued licence plates."
I also wondered... how much do these plates actually cost to manufacture?
Licensys, the Aussie/New Zealand company that manufactures the aluminium plates in Otahuhu, were reluctant to share the prices they charge KiwiPlates for each design.
Staff wouldn't provide their list of prices they charge KiwiPlates, but they say on their website that they charge $24.17 to recreate standard government-issue number plates. Mystery solved - they're pretty cheap to actually make.
I also asked KiwiPlates manager Mark Wilson, straight up, if he is running a monopoly.
"There are several companies people can purchase plates from throughout New Zealand," he told me.
"In addition to KiwiPlates, individuals can purchase plates in the thriving second-hand market via various companies such as: Trade Me, Mr Plates, Numberplates.co.nz, and Facebook Marketplace."
Nice try, Mr Wilson, but that wasn't the question.
Only KiwiPlates are able to sell new personalised plates, and they have no competition. Did I mention already they are also looking in to taking over the second-hand market as well?
Anyway, let's get back to the main issue - is NZTA getting what it wanted from KiwiPlates?
When NZTA put out a tender for the new plate seller, they wanted "to deliver a fresh view of the personalised plates market in order to improve customer access and choice and to improve the level of revenue returned to the Transport Agency's road safety programme".
KiwiPlates says they've introduced layby, so I guess you could say they've improved "access" in a way, but also, if you define "access" as the general ability of the average Kiwi to get a hold of one, not a lot has changed at all.
Spending $1000 on a piece of aluminium is still quite likely to put people off, thus reducing "customer access". Yes, I know it's subjective, but I think most people would consider these things expensive.
The median weekly wage for Kiwis was $997, according to Statistics New Zealand, as of June this year.
Why should Kiwis give a week's wages to this multinational company for their R1POFF plate if NZTA won't even tell us how much they keep of that for road safety?
It just feels secretive. It feels like we're being had.
Now, I don't want to criticise so harshly without giving some positive input as well - so here are two ideas which could well and truly "deliver a fresh view of the personalised plates market":
Option A. NZTA opens up the personalised plate market to more than one company, driving prices down for consumers, selling more plates, ending the monopoly, and reducing the stigma that only the well-off can afford personalised plates.
Option B. NZTA hires some staff and begins selling these plates themselves, cutting out the middleman. I'm amazed that this isn't happening already - they could keep all the revenue to themselves, spend much more on road safety, while also reducing prices for consumers in one fell swoop.
Maybe it's time for a truly fresh approach, not from the plate provider - but from NZTA themselves.
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