INTRODUCING an ‘effects test’ would strengthen Australian competition law and rebalance power for primary producers across the agricultural supply chain, says the National Farmers Federation.
The NFF was one of several farm groups who lauded the Coalition’s announcement that federal cabinet had agreed to amend Section 46 of the Competition and Consumer Act to implement an ‘effects test’.
NFF CEO Tony Mahar said his group had advocated heavily for an ‘effects test’ given its importance to building open and transparent marketplaces that facilitated high levels of competition.
Mr Mahar said the shift towards examining the effects of company behaviour on competition would provide a more objective measure to assess the impacts of market power abuse and anti-competitive behaviour, within supply chains.
He said the NFF didn’t view the change as a silver bullet solution but saw it as an important tool to improve competitiveness and drive innovation, productivity and profitability across the farm-sector.
The ‘effects test’, in conjunction with the appointment of Australian Farm Institute executive director Mick Keogh as the Australian Competition and Consumer Commission’s first Agricultural Commissioner, created a more level playing field for all supply chain participants, he said.
“This has been an advocacy priority for our organisation and we applaud the efforts of the Deputy Prime Minister Barnaby Joyce and the Nationals in also being proponents of the ‘effects test’ and Treasurer Scott Morrison for being consultative in approach and listening to industry,” he said.
“Agriculture has burgeoning global opportunities which, if prioritised accordingly, will be a lead contributor to the national economy.
“The industry deserves to be positioned as an economic priority, including having a legal framework that facilitates growth and financial gain for all, starting at the very foundation of the sector – the primary producer.”
The Cattle Council of Australia said an ‘effects test’ would give the ACCC meaningful provisions to protect businesses that are subject to the misuse of market power and enabled courts to assess whether conduct was harmful to the competitive process.
CCA CEO Jed Matz said the reforms were important to the beef industry where power was concentrated in the industry’s value chain.
Mr Matz said the current provisions had limited scop which allowed conduct – that had an anti-competitive impact on the market place - to go unchecked which had eroded beef producers confidence in the competition law framework “as a whole”.
“CCA is supportive of this reform as it strikes a good balance between protecting the competitive process whilst ensuring competitive behaviour and innovation are not stifled,” he said.
“The role of competition law framework must be to offer an environment in which competition between businesses can occur to drive efficiency and innovation, for the benefit of consumers.’
Mr Matz said the reform focused on the effect of the company’s activity and not their intent and also opened opportunities for cattle producers to have anti-competitive conduct investigated.
“The inadequacies of competition law in protecting cattle producers has been clearly illustrated and this will provide a more even market place,” he said.
“This is about rebalancing the power within the agricultural industry, allowing producers to operate on a level playing field in a fair market place.’’
Australian Dairy Farmers President Simone Jolliffe said in conjunction with the government’s Food and Grocery Code, the move to adopt an ‘effects test’ was a constructive step toward fostering a more competitive business environment.
Ms Jolliffe said Mr Keogh’s appointment and the creation of an Agricultural Engagement and Enforcement Unit at the ACCC highlighted the government’s commitment to fostering supply chain competition.
She said in addition, the government had also agreed to strengthen Unfair Contract Protection Laws which would assist small business and were set to take affect later this year.