Australian Competition and Consumer Commission calls for changes to trading regulations in fresh food supply chains
The nation’s competition watchdog has called for a dramatic redress of the way fresh food suppliers and big retailers interact, following a three-month probe.
NEW fair trading laws are needed to address the bargaining power imbalance between farmers and retails, the nation’s competition watchdog says.
The Australian Competition and Consumer Commission released its Perishable Agricultural Goods Inquiry Report today, recommending the introduction of an unfair trading practices prohibition, and the strengthening of the small business unfair contract term protections and the Food and Grocery Code of Conduct.
ACCC deputy chairman Mick Keogh said the inquiry found a number of features of perishable agricultural goods supply chains had the potential to cause harm to suppliers.
“In most perishable agricultural goods markets, there are many farmers, but few processors or wholesalers, and even fewer major retailers,” he said.
“This makes farmers particularly vulnerable to issues stemming from limited competition at the wholesale or retail level. In addition, the more perishable a product is, the weaker the farmer’s bargaining power often is.”
In August, Federal Agriculture Minister David Littleproud triggered the ACCC probe.
During its three month run, the ACCC heard a range of allegations about conduct by parties with strong bargaining power relative to their suppliers.
Allegations listed in the report include unilateral variations of supply terms which greatly affect farmers’ income, and commercial retribution for suppliers who seek a price increase or raise concerns about the conduct of the other party.
While submissions to the ACCC included allegations of harmful conduct across all perishable agricultural industries, the most serious allegations arose in the chicken meat and horticultural industries.
“We will investigate potential unfair contract terms in the chicken meat industry following this inquiry, as well as reports that some horticultural wholesalers are trading in breach of the Horticulture Code,” Mr Keogh said.
In an initial joint response issued this afternoon, Mr Littleproud and Federal Treasurer Josh Frydenberg acknowledged the probe found “one-sided contracting practices, commercial retribution, inefficient allocation of risk and a lack of price transparency.”
“In particular, the ACCC indicated that as a result of matters identified during the inquiry, it will conduct further compliance activity with respect to a range of alleged unfair contract terms in the chicken meat industry and alleged non-compliance by horticulture wholesalers within the Horticulture Code,” the ministerial statement said.
“The Government is progressing a number of initiatives that support the findings and recommendations of the ACCC, including legislation to strengthen unfair contract term protections under the Australian Consumer Law, enhancing the Food and Grocery Code of Conduct and improving price transparency for the dairy industry under the Dairy Code.
MORE
Fonterra steps up farmgate figure for New Zealand suppliers
New Zealand suppliers of Fonterra have received some welcome news from the Auckland-based processor — but it’s still the farmgate status quo for Australian farmers.
Top tales of survival in the bush
The miraculous discovery of missing man Robert Weber is just the latest tale of survival in the bush in Australia. These are some of the most famous and heartwarming from our history.