Farmers hope for answers from ACCC grocery inquiry

Posted by Daniel Palmer on 30th July 2008

The National Farmers’ Federation (NFF) is looking forward to the Australian Competition and Consumer Commission (ACCC) providing the results of its much-anticipated Grocery Price Inquiry to the Australian Government tomorrow.

“Farmers are, quite literally, at the bottom of the food supply chain,” NFF Vice-President Charles Burke said. “Once our produce leaves the farm we have no idea where the added costs that consumers bear come from.”

Mr Burke added that the nature of the supply chain dictates there will be added costs, but is unsure whether or not this reasonably accounts for the difference in price from farm gate to consumer. “Of course, there are all the additional links in the chain – transport, processing and packaging – before it even gets to the retail end point,” he said. “Whether there is market failure, inefficiencies, a lack of competition or anti-competitive practices along the chain, we have no way of knowing.”

“That’s what we hope the ACCC’s investigation will shed light on and give farmers and consumers the answers to what precise domestic supply factors are driving higher grocery prices.”

Mr Burke indicated that the whole supply chain needs to be evaluated to ensure there is greater transparency with regard to pricing. “What we do know is what farmers are paid at the farm-gate and what families pay at the check-out are worlds apart. Our consistent focus throughout the Inquiry has been for the ACCC to examine the entire supply chain, not just the retail end,” he reported. “I think it’s fair to that say all Australians are expecting transparency, competition and fairness issues along the supply chain to be fully examined, and the ACCC certainly has the powers to get that job done.”

The ACCC’s findings from the Grocery Price Inquiry are due to be provided to the Rudd Government tomorrow, with contents to be made public at the discretion of the government.

Graeme Samuel, Chairman of the ACCC, has already mooted possible changes to legislation to enhance competition in the sector.

Unit pricing appears certain to be recommended by the competition watchdog and changes to prevent “creeping acquisitions” also appear to be on the cards. An introduction of an industry ombudsman, similar to that suggested in the UK following their grocery inquiry, and a reduction of zoning restrictions could be among the other suggestions.

Mr Samuel indicated in an interview last week that he felt it would be difficult for the ACCC to meet public expectations of the inquiry. “When people are saying we are relying on you, they’ve got an enormous expectation now {and} I’m not sure we can completely fulfill their expectations but that’s the challenge ahead of us,” he told ABC’s Inside Business Program.