The Australian Competition and Consumer Commission (ACCC) has an important role in helping to ensure the rights and responsibilities of businesses, under Australian Consumer Law, are understood and that businesses compete fairly and transparently.
The agricultural supply chain can become quite complex and often involves many businesses, small and large, interacting at different points. It can sometimes be hard to see where profits and losses are sustained and by which businesses across the various interactions and negotiations. Complex operating environments can lead to power imbalances between businesses, and this is often a challenge for the agricultural sector particularly when small farmers are negotiating contracts with large multi-national companies.
In recent months, consumers saw noticeable increases in some food products on the supermarket shelves, but many were not aware that in most cases, very little or any at all of the increased purchase price of goods made it back to the farm gate. While there are multiple reasons for this being the case in this instance, the ACCC has a vital role in overseeing a fair operating environment for all businesses so that farmers are ultimately paid appropriately for the goods they produce.
Last week, the Federal Court found that Lactalis breached the Dairy Code of Conduct by failing to meet some of its obligations in relation to the 2020-21 milk season. These proceedings were brought forward by the ACCC. The Dairy Code of Conduct started in 2020 to address significant transparency issues and bargaining power imbalances between dairy farmers and processors which in many cases, saw dairy farmers not being paid fairly for their milk production.
Sometimes criticised as a toothless tiger, it is encouraging to see this action led by the ACCC and it gives farmers increased hope that industry codes of conduct can in fact be a useful tool in protecting those farmers who may have limited bargaining power with much larger processors and that there will be consequences for those who fail to comply with the codes.
The ACCC recently updated its Horticulture Code guidance which is designed to help growers and traders understand their rights and fulfill their responsibilities under the code and to promote greater price transparency for growers about what traders pay for their produce.
The Food and Grocery Code of Conduct independent 2022 review is also now open and invites direct suppliers of Aldi, Coles, Metcash and Woolworths to provide feedback on their dealings with these grocery retailers. This is an important process and QFF encourages all respective farmers to give feedback before the survey closes on Monday October 3.
As we continue to see escalating input prices and an ongoing workforce pinch, the real cost of production continues to rise. It is critical that the business operating environment is fair and transparent to enable a sustainable future for farming in Queensland and better visibility for consumers as to where their dollar actually goes in relation to their purchasing decisions.
