Proposed competition overhaul: What could it mean for dairy?

Apr 08, 2015

On 30 March, Australian Dairy Farmers (ADF) welcomed the release of the Competition Policy Review Panel’s final report as crucial to creating a healthier, more competitive and successful market place for consumers, food suppliers and retailers.

Also known as the Harper Review, the independent policy review’s stronger focus on balancing market power between supplier and retailers has been well received as acknowledgement of the significant input and recommendations ADF made on competition law and policy.

The Review is the first evaluation of Australia's competition policy in 22 years and recommends strengthening provisions for abuse of market power, as well as proposing changes to collective bargaining that will strengthen farmers’ negotiating power.

ADF President, Noel Campbell said the Review’s recommendation to re-introduce an Effects Test to measure the ‘purpose, effect or likely effect’ of retailer actions on suppliers was particularly positive.

“We support the Panel’s recommendations to increase the focus on dealing with the current imbalance of major retailer market power, through initiatives such as the Effects Test.

“Farmers need every opportunity to improve their negotiating power for profitability and returns at the farm-gate to be achieved,” Mr Campbell said.

Mr Campbell did however express disappointment that there was no meaningful consideration in the review of the role of a Mandatory Code of Conduct, or the need for a Supermarket Ombudsman “with teeth” to address the issue of potential misuse of market power.

“The unequal distribution of market power means that farmers are often backed into a corner when it comes to farm-gate prices. This is a disadvantage that is heightened due to logistical constraints in supplying perishable goods,” Mr Campbell explained.

Mr Campbell said ADF looked forward to the opportunity to respond to the Review’s recommendations to ensure that our nation’s competition legislation is robust and able to protect our dairy farmers going forward.

“ADF will also continue to advocate as legislative amendments are developed to prevent potentially damaging situations, such as retailer predatory pricing in future,” Mr Campbell said.

The Competition Policy Review is one of three significant developments to occur in 2015, alongside the announcement of the Competition and Consumer (Industry Codes – Food and Grocery) Regulation 2015 in March, and the Agricultural Competitiveness White Paper which is due for release later this year.

To view ADF’s submission to the Competition Policy Review,click here.

Collective bargaining: A key negotiation approach

Nov 26, 2014

Officially launched by the Federal Minister for Agriculture, Barnaby Joyce in Taree, NSW, the ‘Collective Bargaining for Dairy Farmers’ guide is an easy to read document for dairy farmers interested in forming collective bargaining groups to negotiate with milk buyers.

Prepared by Dairy Australia, in conjunction with Australian Dairy Farmers (ADF), the guide aims to provide practical advice and insights for farmers looking to level the playing field between small suppliers and large milk buyers.

The guide explores the mutual benefits both dairy farmers and milk buyers can receive when collective bargaining is employed effectively. While not suitable for all, collective bargaining has the potential to deliver many benefits to dairy farmers, including supply chain efficiencies, new marketing opportunities, greater input into contractual terms and more certainty on price.

From the milk buyers end, collective bargaining can result in enhance milk quality, guaranteed year-round fresh milk supplies and improved two-way communications with the collective bargaining group. These mutual benefits show that when effectively employed, collective bargaining can be a win-win for both parties involved.

In 2011, ADF renewed its authorisation grant from the ACCC to collectively bargain with milk processors. This authorisation enables dairy farmers to form and register collective bargaining groups under ADF’s existing authorisation without having to separately apply to the ACCC.

For more information about collective bargaining groups and authorisation guidelines, please contact the ADF Office: (03) 8621 4200

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