‘Effects test’ another tool to balance market power

Posted on Monday, March 28, 2016 - Category: In the News

The announcement in March 2016 of an ‘effects test’ will strengthen competition across the grocery supply chain. ADF has advocated strongly for the change since 2011, which will be included in section 46 of the Competition and Consumer Act 2010.

The provision will be a further tool to help the Australian Competition and Consumer Commission (ACCC) address the current unequal distribution of market power and encourage transparency to the benefit of producers, consumers and retailers.

ADF President, Simone Jolliffe said she looked forward to working with the government to ensure that the legislation prevents firms with significant market power from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition.

“The effects test is another tool to help provide integrity and transparency regarding the impact of retailer actions on suppliers,” Mrs Jolliffe said.

“In conjunction with the government’s introduction of the Food and Grocery Code, which included a large number of ADF’s recommendations, this is a constructive step toward fostering a more competitive business environment.”

“Further, the appointment of Mick Keogh OAM as the ACCC’s first Agricultural Commissioner and an Agricultural Engagement and Enforcement Unit, highlights that the government is committed to strengthening competition across the supply chain.”

Mrs Jolliffe said the reforms will support consumers’ interests as well as dairy farmers.

“Moving toward a more objective measure to assess the impact of anti-competitive behaviour will build a more open and transparent marketplace.”

ADF is hopeful that this will assist in preventing damaging practices, including predatory pricing in future.

ADF thanked the Prime Minister, Deputy Prime Minister, the Treasurer, the Minister for Small Business and the National Party for their strong support and action on this important reform.



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