Treasury launches inquiry into supply chain power imbalance in agricultural good industry

The Government will direct the Australian Competition and Consumer Commission (ACCC) to undertake an inquiry into harmful imbalances of bargaining power between farmers, intermediaries, including processors, and retailers in the domestic supply chains of perishable agricultural goods in Australia.

The Government is focussed on ensuring the right domestic policy settings are in place, and is directing the ACCC to examine the nature of bargaining power in the supply chains for perishable agricultural goods covering meat (pork, lamb, beef), poultry (chicken meat and eggs), seafood, and horticulture goods where not already covered by a mandatory industry code.

This inquiry will examine whether imbalances in bargaining relationships exist and the extent to which they can be addressed through existing regulatory arrangements. The ACCC will be provided the power to seek evidence, documents and information from businesses within the domestic supply chain to assess if there is a harmful imbalance of bargaining power occurring.

The ACCC will also examine the effectiveness of the new Dairy Code of Conduct including by considering options to extend the code across the entire domestic dairy supply chain.

In conducting its inquiry, the ACCC is to have regard to the interests of Australian consumers and how the impacts of unreasonable bargaining power imbalances in the supply chain can affect them.

The Government is committed to supporting a vibrant and sustainable market-based agricultural sector that operates for the benefit of consumers. Importantly, in conducting the inquiry the ACCC will take into account the Government’s long-standing policy that it does not regulate prices along the supply chain.

We want to ensure that the regulatory framework remains fit for purpose in light of the significant disruptions caused by the Coronavirus crisis and our strong commitment to growing Australia’s agricultural sector.

All producers of fresh food – including chicken, beef, lamb, pork, eggs, dairy, seafood, fruit and vegetables – are encouraged to make a submission to this important inquiry. The ACCC will be accepting confidential submissions in order to encourage as many parties as possible to provide their view to the inquiry.

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