The Australian Competition and Consumer Commission (ACCC) has called for new fair trading laws to address harmful practices arising from unchecked bargaining power imbalances in the production and supply of fresh food to consumers.
The ACCC’s Perishable Agricultural Goods Inquiry Report, released yesterday, recommended the introduction of an unfair trading practices prohibition, and the strengthening of the small business unfair contract term protections and the Food and Grocery Code of Conduct.
The inquiry examined markets for perishable agricultural goods, including meat products, eggs, seafood, dairy products and horticultural goods. The ACCC analysed the factors that affect the bargaining power of farmers, processors and retailers of perishable agricultural goods, and where this can lead to economic harm.
“The inquiry found that a number of features of perishable agricultural goods supply chains have the potential to cause harm to suppliers and the efficiency of markets more generally,” ACCC Deputy Chair Mick Keogh said. “In most perishable agricultural goods markets, there are many farmers, but few processors or wholesalers, and even fewer major retailers.”
“This makes farmers particularly vulnerable to issues stemming from limited competition at the wholesale or retail level. In addition, the more perishable a product is, the weaker the farmer’s bargaining power often is.”