Effects test needs real teeth
FOLLOWING THE long awaited and fought for passage of the ‘effects test’ legislation through the Senate, there are many now asking where we go from here. Farmers rightfully want to know what the Government is intending to do to progress the test from paper into action. Questions still remain on what exactly this new power will look like and when or whether it will address the issues dairy farmers have raised time and time again. A multitude of industries including dairy are looking to the Australian Competition Consumer Commission (ACCC) to act upon unfair market practices. As one of the strongest advocates for the test, Queensland Dairyfarmers’ Organisation (QDO) see it as a major component in a range of legislated safeguards and industry authorised practice changes needed to improve market fairness issues affecting trade between retailers, processors and farmers. For the dairy industry, the test should be most useful for market issues occurring between processors and retailers. If applied properly it should also benefit further down the value chain. It is now up to the ACCC to be vigorous on issues such as predatory pricing, in particular between brands where the market is the supermarket shelf. For example, how is it not predatory to sell one brand on the shelf with little or no mark up, yet set significantly marked up prices on competing brands? While anyone can raise complaints, it is up to the ACCC to take action and act upon the powers legislation gives them. With the exception of a few large companies, most members and organisations in the dairy industry do not have the wherewithal to do this. Farmers are relying on the ACCC to fulfil this role. As the final touches are being put on the ‘effects test’ regulation and guidelines, the message from Queensland dairy farmers is to get the job done promptly and properly.