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On 23 August, we saw the treasurer, The Hon Jim Chalmers MP and the Assistant Minister for Competition, Charities and Treasury, Dr Andrew Leigh announce a review of competition policy settings in Australia.
The Australian retail landscape is dominated by predominately two large retailers and is potentially one of the biggest duopolies globally. We can see high price to earnings ratios for the major ASX listed retailers, with them currently valued above all of Australia’s major banks and mining companies. Does this indicate that investors are aware of the significant market share powers and therefore willing to over invest, as they can expect exceptional returns over a long period?
Regardless, it is fair to say that the Australian Horticulture sector is significantly exposed to the existing oligopsony in the domestic retail landscape and the avocado industry is no exception. The acknowledgement for action has been noted by the Federal Government, the former ACCC chair and the Treasury’s Independent Reviewer. That is why competition policy is a key area of focus for the National Farmers’ Federation Horticulture Council of which Avocados Australia is an active member.
There are a number of important events in the legislative landscape which you need to be aware of, they are:
Competition Policy Review – Announced 23 August, ongoing for 2 years.
The competition policy review announced on 23 August 2023 will look at competition laws, policies and institutions. There will be a focus on reforms that would increase productivity, reduce the cost of living and boost wages. You can read the National Farmers Federation (NFF) Horticulture Councils response to the announcement, here.
A Competition Taskforce has been established in Treasury to conduct the review, which will be progressed over two years and involve targeted public consultation. It will provide continuous advice rather than a formal report, so progress can be made over time. There is no doubt, the current Assistant Minister for competition certainly has an appetite for competition policy and with some heavy hitters recently being appointed to the competition taskforce, we remain optimistic.
You can read more on the Treasury Competition Taskforce, here.
Food and Grocery Code Review – opened October 2023
Following the review of the Dispute resolution process provisions of the Food and Grocery Code which was conducted in 2022. There will be a review of the remaining provisions of the Code, which kicked off in October 2023.
The Code is scheduled to sunset (be automatically repealed) on 1 April 2025. Prior to sunsetting, a review of the Code is also required to determine whether the Code remains fit for purpose.
In accordance with these requirements, a reviewer will be appointed to undertake this review of the Code, supported by a secretariat within Treasury.
The review will:
- assess the effectiveness of the Code provisions (other than Part 5 of the Code) in achieving the purpose of the Code to improve the commercial relationship between retailers, wholesalers and suppliers in the grocery sector, and
- consider the need for the Code, including whether it should be remade, amended or repealed.
In evaluating the purpose and features of the Code, the review will have particular regard to:
- the impact of the Code in improving commercial relations between grocery retailers, wholesalers and suppliers,
- whether the Code’s provisions should be extended to other retailers or wholesalers operating in the food and grocery sector,
- whether the Code should be made mandatory, and
- whether the Code should include civil penalty provisions.
A report of the review is to be prepared by 30 June 2024 for consideration by the Assistant Minister for Competition, Charities and the Treasury. The report will include findings and any recommendations based on the evidence received during the review process, in response to the terms of reference.
The review will include the release of a consultation paper to seek public submissions and consultations with key stakeholders (including the Code’s signatories, industry body representatives, the Australian Competition and Consumer Commission and other agencies).
Any submission is only as strong as the supporting evidence provided so we will be reaching out to members when appropriate for feedback to inform submissions.
Changes to the law on unfair contract terms
Changes to the law on unfair contract terms will come into effect on 9 November 2023.
From this date, proposing, using or relying on unfair contract terms in standard form contracts will be banned and penalties for breaches of the law will apply.
Other key changes relate to deciding whether a contract is a standard form contract and the definition of a small business contract.
The changes apply to:
- standard form contracts made or renewed on or after 9 November 2023
- a term of a contract that is varied or added on or after 9 November 2023.
Where a term of a contract is varied or added on or after 9 November 2023, the changes relevant to deciding whether a contract is a standard form contract apply to the whole contract.
Read More, here.
Unfair Trading Practices Provisions – Consultation Open until 29 November 2023
In September 2022, the Commonwealth, state and territory consumer ministers agreed that the Commonwealth would lead a public consultation on options to address unfair trading practices on behalf of all jurisdictions.
The Consultation Regulation Impact Statement (Consultation RIS) seeks further evidence on the nature of unfair trading practices in Australia and the extent of consumer and small business harm arising from potential gaps in the Australian Consumer Law. Treasury is also seeking stakeholder feedback on policy options to address unfair trading practices in Australia.
Unfair trading practices are particular types of commercial conduct which are not prohibited by existing provisions of Australia’s consumer laws, but which can nevertheless distort competition and result in significant consumer and small business harm.
Avocados Australia will provide input into this consultation, as a member of the NFF Horticulture Council.
Food & Grocery Code – Independent Review Supplier Survey – closed 3 October 2023
As part of the changes introduced in 2020, each year around mid-September the Independent Reviewer opens the annual “Survey of Suppliers”.
This was an opportunity for retail suppliers to provide anonymous, frank and fearless feedback on their dealings with the major supermarkets and wholesalers to the Independent Reviewer.
An anonymised high-level summary will be published on the Independent Reviewer’s website before the end of the year. Results from the surveys assist to identify emerging issues in the grocery supply chain and foster fair and effective relationships. Results may also be used to inform future Government policy and regulations in the food and groceries industry.
Looking for resources to assist you right now?
We will keep members updated and represented as the above events continue to evolve. In the meantime, we recommend you familiarise yourself with a number of resources to support your dealings with retailers:
Food & Grocery Code of Conduct
Are you across the Food & Grocery Code of Conduct? Read it here.
How to raise a complaint?
If you are a supplier doing business directly with ALDI, Coles, Woolworths or Metcash then you can benefit from the protections under the Food and Grocery Code (the Code). If you feel like you have experienced poor behaviours by the buying team within the major supermarkets or wholesaler you can lodge a complaint using the Code. Click here for more information.
Are you effective in retail negotiations?
AUSVEG has recently run a FREE webinar on negotiating with retailers. If you haven’t seen it, it is available to watch HERE.
Collective Bargaining for the Agriculture Sector
This report commissioned in 2015, touches on a number of points which remain relevant today, read here.
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This article was produced for the November 2023 edition of the Avo Insider.