The 'effects test' has proven to be a vexed issue for the Coalition government after being one of 56 recommendations made via the Harper competition policy review handed down in March last year.
The change aims to reform to Section 46 of the Competition and Consumer Act and has been heavily backed by national farming groups and the National Party but to date senior Liberals have resisted.
The new Coalition agreement signed after Malcolm Turnbull became Prime Minister in mid-September last year stipulated the National party’s support for the competition reform.
Last November, Federal Treasurer Scott Morrison – who assumed responsibility for competition policy under Mr Turnbull’s leadership – announced further consultation was needed, before responding to the Review’s recommendation on market power abuse reforms.
A discussion paper was then released seeking views of interested parties on options to strengthen the misuse of market power provision under Section 46.
With submissions now by February 12, Federal Agriculture and Water Resources Minister Barnaby Joyce this week called on farm stakeholders to ensure their views are heard.
A final response on the ‘effects test’ issue is reportedly due to be presented to federal cabinet in March.
“Anti-competitive behaviour and misuse of market power was a core theme of feedback received from the majority of agricultural stakeholders as part of the Harper Review into Competition Policy,” Mr Joyce said.
I want any farmers who have experienced anti-competitive behaviour to share their ideas.
“This government is committed to rectifying supply chain issues and fostering a competitive and transparent business sector so that all participants in the market place are treated fairly.
“The Harper Review Panel recommendation to amend Section 46, which relates to the misuse of market power, is an important element in achieving this.”
Mr Joyce said the Coalition government was determined to get the design of the competition reforms right, hence the Treasurer’s discussion paper being released.
“On the back of the Harper Review Panel recommendation, I want any farmers who have experienced anti-competitive behaviour to share their ideas,” he said.
“Submissions close on February 12 and it’s important any measures introduced are informed by the experiences and ideas of people in the agriculture sector.”
Minister Joyce said there was widespread support to strengthen the current misuse of market power provisions in line with the Harper review recommendation, including by the current ACCC Chairman Rod Sims and former Chairman, Professor Allan Fels.
This week, Australian Dairy Farmers (ADF) reinvigorated calls for the Federal Cabinet to adopt stronger misuse of market power laws to foster a more competitive business environment.
They said the January 26, 2016 marked five years since Coles’ supermarket dropped the price of its home brand milk to $1 per litre, igniting a price war with Woolworths that reduced the value of milk to an unsustainable level.
ADF President Simone Jolliffe said there had been important breakthroughs for competition policy since 2011, like the Food and Grocery Code and the Harper Review recommendations.
Mrs Jolliffe said ADF also welcomed the announcement in the Agricultural Competitiveness White Paper of $11.4 million over four years to boost the ACCC’s engagement with the agriculture sector including a new Agricultural Engagement Unit.
However, she said the industry would continue to advocate for the regulating bodies to have the power to prevent predatory pricing in future.
“ADF also strongly supports the Harper Review’s recommendations for any updated competition and consumer law to include an effects test,” she said.
“Addressing the misuse of market power is crucial in determining the Australian dairy industry’s future profitability and sustainability.”
Government discussion paper and submission details available at… www.treasury.gov.au/ConsultationsandReviews/Consultations/2015/Options-to-strengthen-the-misuse-of-market-power-law