The Queensland Dairyfarmers Organisation (QDO) and Australian Dairy Farmers (ADF) have applauded the introduction of an ‘effects test’ by the Federal Government, which they believe will strengthen competition across the grocery supply chain.
The QDO and Australian Dairy Farmers advocated strongly for the change since 2011, after Coles started the supermarket milk price war which has seen many farmers forced out of the industry.
The provision, which will be included in section 46 of the Competition and Consumer Act 2010, will address unequal distribution of market power and encourage transparency for the benefit of producers, consumers and retailers.
The commitment by the Federal Government came only two weeks after QDO and ADF, in partnership with the Alliance of Industry Associations for change to s46, visited Canberra to meet with Treasurer Scott Morrison, Minister for Small Business Kelly O’Dwyer and Deputy Prime Minister Barnaby Joyce.
QDO President Brian Tessmann said the new provision will prevent firms with substantial market power from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition.
“The effects test is another tool to help provide integrity and transparency regarding the impact of retailer actions on suppliers,” Mr Tessmann said.
“QDO has been very vocal its support for the introduction of the ‘effects test’ as it will deliver direct benefit to our Queensland members.”
ADF President Simone Jolliffe said that in conjunction with the government’s introduction of the Food and Grocery Code, the ‘effects test’ was a constructive step toward fostering a more competitive business environment.
“Further, the appointment of Mick Keogh as the Australian Competition and Consumer Commission’s first Agricultural Commissioner and an Agricultural Engagement and Enforcement Unit, highlights that the government is committed to fostering competition across the supply chain,” Ms Jolliffe said.
“In addition the Government has agreed to strengthen Unfair Contract Protection Laws which will assist small business, and are set to take affect later this year.”
Ms Jolliffe said the reforms will support consumers’ interests as well as dairy farmers.
“Moving toward a more objective measure to assess the impact of anti-competitive behaviour will build a more open and transparent marketplace,” Ms Jolliffe said.
The QDO and ADF said they are keen to see the new clause applied quickly to see damaging practices, including predatory pricing, outlawed.
