AGRICULTURAL related businesses are set to face upcoming legal action pushed by the competition watch-dog, for alleged breaches the Competition and Consumer Act.
Australian Competition and Consumer Commission (ACCC) boss Rod Sims used an address at an event for the Committee for Economic Development of Australia in Sydney today to raise the alert in outlining 2017 enforcement priorities.
Without naming the individual agricultural businesses or any potential charges, he indicated the ACCC would be commencing action in the future.
It’s understood the businesses likely to be dragged before court are unlikely to shock the farm sector, given the ACCC’s current inquiries into competition issues concerning the dairy, beef, grains and horticulture sectors.
“We expect to launch some cases alleging breaches of the Act by some firms in the agriculture sector,” Mr Sims said.
Mr Sims’s talk highlighted action taken by the ACCC since a dedicated Agriculture Enforcement and Engagement Unit and Commissioner Mick Keogh was created in October 2015 out of an initiative driven through the federal government’s Agricultural Competitiveness White Paper, via an $11.4 million investment.
He said since the farm-enforcement team was set-up, the ACCC had undertaken a “significant amount of work examining competition and fair trading in the agriculture sector”.
“Consulting widely across the industry, through a new consultative committee, forums and formal submissions processes, we have initiated inquiries in agricultural markets such as cattle and beef, grains and horticulture,” he said.
“We will build on this work over the next 12 months.
“Late last year, we commenced an inquiry into price competitiveness, trading practices and the supply chain in the Australian dairy industry.
“Our issues paper received many submissions and we are currently holding forums in major dairy production areas in each state.
“We will deliver a report of the inquiry’s findings by November 1, 2017.”
As part of its 2017 enforcement priorities, Mr Sims says the competition regulator would “gravitate towards larger businesses” and seek higher penalties against companies.
He said the ACCCS’s priorities this year would be unfair contract terms, cartels, and misconduct in the health, construction and agriculture sectors.
An ACCC’s inquiry into supply chain concerns in the beef sector supply chain was prompted by allegations of collusion linked to a controversial boycott of a sale at the Barnawartha cattle saleyards in regional Victoria, by nine buyers.
Mr Sims said the ACCC received about 200,000 reports form businesses and the public per year of which about 500 were escalated for further consideration and investigation and about 30 lead to the ACCC taking court action.
The ACCC can also use its special powers to compel confidential information from sources, like data on agricultural supply chain costs and pricing which is likely to be revealed in reports resulting from its current inquiries showing who gets what.
“When the ACCC takes action, it sends a message,” Mr Sims said.
“Our enforcement record against anti-competitive or anti-consumer behaviour lets businesses know that we are serious about bringing them to account.”
Mr Sims said market studies were a “vital tool” for the ACCC.
“Sometimes it is not enough to only consider explicit and immediate breaches of the Act; a wider look can be necessary,” he said.
“In the past year, we commenced three major market studies examining issues in the cattle and beef sector, the new car retailing industry, and the communications sector.
“We have now also started a formal inquiry into Australia’s dairy industry following a ministerial direction under subsection 95H(1) of the Act and are currently holding a series of forums in dairy farming areas.
“These market studies help us and the Australian community understand industry practices and dynamics, identify what is not working well and how we, and other agencies or industry can address issues in the market.”
Ms Sims said over the next 16 months the ACCC would continue education activities to support businesses during the transition period for new country of origin labelling laws.
He said consumers expected clear and truthful information about where their food comes from and were “indignant when they do not get this”.
“The new labelling system is comprehensive, giving consumers more detailed information than previously available to help them make informed purchasing decisions,” he said.
“Businesses have until July 2018 to implement the new labelling arrangements.”