Proposed competition overhaul: What could it mean for dairy?

On 30 March, Australian Dairy Farmers (ADF) welcomed the release of the Competition Policy Review Panel’s final report as crucial to creating a healthier, more competitive and successful market place for consumers, food suppliers and retailers.

Also known as the Harper Review, the independent policy review’s stronger focus on balancing market power between supplier and retailers has been well
received as acknowledgement of the significant input and recommendations ADF made on competition law and policy.

The Review is the first evaluation of Australia’s competition policy in 22 years and recommends strengthening provisions for abuse of market power, as
well as proposing changes to collective bargaining that will strengthen farmers’ negotiating power.

ADF President, Noel Campbell said the Review’s recommendation to re-introduce an Effects Test to measure the ‘purpose, effect or likely effect’ of retailer
actions on suppliers was particularly positive.

“We support the Panel’s recommendations to increase the focus on dealing with the current imbalance of major retailer market power, through initiatives
such as the Effects Test.

“Farmers need every opportunity to improve their negotiating power for profitability and returns at the farm-gate to be achieved,” Mr Campbell said.

Mr Campbell did however express disappointment that there was no meaningful consideration in the review of the role of a Mandatory Code of Conduct, or
the need for a Supermarket Ombudsman “with teeth” to address the issue of potential misuse of market power.

“The unequal distribution of market power means that farmers are often backed into a corner when it comes to farm-gate prices. This is a disadvantage that
is heightened due to logistical constraints in supplying perishable goods,” Mr Campbell explained.

Mr Campbell said ADF looked forward to the opportunity to respond to the Review’s recommendations to ensure that our nation’s competition legislation is
robust and able to protect our dairy farmers going forward.

“ADF will also continue to advocate as legislative amendments are developed to prevent potentially damaging situations, such as retailer predatory pricing
in future,” Mr Campbell said.

The Competition Policy Review is one of three significant developments to occur in 2015, alongside the announcement of the Competition and Consumer (Industry Codes – Food and Grocery) Regulation 2015 in March, and the Agricultural Competitiveness White Paper which is due for release later this year.

To view ADF’s submission to the Competition Policy Review,click here.