Private member’s Bill aims to curb supermarket powers

Posted by AFN Staff Writers on 12th June 2013

A new Bill due to be introduced to the Australian Parliament next week by Independent MP Rob Oakeshott aims to strengthen rules about misuse of market power and curb the powers of Australia’s major supermarkets.

Independent MP Rob Oakeshott will introduce a private member’s Bill that moves to change legislation to allow the Australian Competition and Consumer Commission to make judgements in “a broader context than the direct consumer affected, or the direct supplier affected”, according to a report from The Weekly Times Now.

The Bill would give the ACCC the power to obtain documents about the food supply chain and “reasonably likely” impacts, which would allow the commission to create and publish a ‘supply chain impact statement’.

Mr Oakeshott’s initiative follows an ACCC decision in 2011 that consumers benefited from the so-called ‘milk wars’ and that the supermarkets were bargaining with large processors and not abusing their market power over farmers. But Mr Oakeshott said this pricing was concerning for dairy farmers.

“Their concern is that, in the long term, the processors would look to dairy farmers to deliver the fresh product at lower prices,” Mr Oakeshott said in a draft letter to fellow MPs, outlining the Bill.

“Anecdotally, the prices expected at the farm gate to allow the consumer to purchase milk for $1-per-litre may not cover the basic on farm cost of production for all but the largest dairies,” Mr Oakeshott said. “Taking a long-term view, a reasonable perception would be the win for consumers now may result in higher prices as more and more dairy farmers leave the industry,” he said.

The introduction of the new Bill comes as the ACCC continues its investigations into the possible misuse of market power by the major supermarkets. The ACCC has said that it will make use of its “mandatory acquisition” powers to obtain information that would help protect the anonymity of suppliers who had shown the commission evidence that supported their claims of “unfair supermarket conduct”.

The Australian food and grocery sector is also expecting plans will soon be finalised for a voluntary industry code of conduct for supply contracts and negotiations between suppliers and supermarkets.