![]() The ACCC also recommended that governments and industries should explore measures to increase price transparency in perishable agricultural goods industries, in order to increase competition. The ACCC has recommended that the Food and Grocery Code, which governs certain conduct by grocery retailers and wholesalers in their dealings with suppliers, be made mandatory and include penalties for contraventions. ![]() “Australian governments and agencies are already discussing a potential prohibition on unfair trading practices, and the findings of our report are further evidence that it’s needed,” Mr Keogh said.īargaining power imbalances are also present at the wholesale level of the supply chains of perishable agricultural goods, and processors and wholesalers exist in a highly contested, tough bargaining environment, the report says. The ACCC has therefore recommended the introduction of an economy-wide unfair trading practices prohibition to address conduct that causes significant harm to businesses. However, the ACCC considers that these upcoming changes will not be enough to address all the significantly harmful practices identified in the inquiry. These include proposals to strengthen Australia’s small business unfair contract terms law, and the ACCC’s new small business collective bargaining class exemption, due to come into effect in early 2021. The report says that certain reforms already being considered would address some of the issues identified through the inquiry. “The effects of imbalances in bargaining power can weaken confidence in markets, reduce incentives to invest, and result in slower productivity growth,” Mr Keogh said. This is particularly the case for farmers, who are typically not in a position to influence the prices they receive for their goods. The report says a lack of price transparency in markets for perishable goods can also weaken bargaining power. “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. 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. 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. The ACCC heard a range of allegations about conduct by parties with strong bargaining power relative to their suppliers. In addition, the more perishable a product is, the weaker the farmer’s bargaining power often is,” Mr Keogh said. “This makes farmers particularly vulnerable to issues stemming from limited competition at the wholesale or retail level. “In most perishable agricultural goods markets, there are many farmers, but few processors or wholesalers, and even fewer major retailers.” ![]() “The inquiry found that a number of features of perishable agricultural goods supply chains have the potential to cause harm to suppliers and the efficiency of markets more generally,” ACCC Deputy Chair Mick Keogh said. The ACCC analysed the factors that affect the bargaining power of farmers, processors and retailers of perishable agricultural goods, and where this can lead to economic harm. The inquiry examined markets for perishable agricultural goods, including meat products, eggs, seafood, dairy products and horticultural goods. The ACCC’s Perishable Agricultural Goods Inquiry Report, released today, recommends 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. Australia’s perishable agricultural goods markets need a new fair trading law to address harmful practices arising from bargaining power imbalances that are not covered by current laws, the ACCC has found.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |