12 Oct 2023
The results of the National Farmers’ Federation’s (NFF) National Farmer Priorities Survey were released last week and highlighted competition as being one of the top issues concerning farmers across the country. This is not surprising. There is nowhere else in the world with the level of supermarket concentration that exists in Australia and QFF has joined other peak bodies for many years in expressing concern about market concentration in the retail sector, particularly in relation to supermarkets.
The agricultural market in Australia largely involves many small-scale farmers supplying very large-scale processors or retailers creating a substantial imbalance in bargaining power.
The Federal Government’s recent announcement of a second review of the Food and Grocery Code of Conduct has been welcomed by QFF. Whilst the intention of the code has been to improve business behaviour in the food and grocery sector, it has not been as successful as had been hoped and hasn’t provided the supply chain certainty farmers and consumers are calling for.
Recommendations from the ACCC’s Perishable Agricultural Goods 2020 inquiry included making the code mandatory, removing the ability of retailers to contract out importation protections in the code, the provision of a truly independent dispute resolution process and the introduction of significant civil pecuniary penalties for code breaches.
Typically, the more perishable a product, the weaker the farmer’s bargaining power. For example, a grain grower may have the option of storing grain until prices increase, a chicken meat producer or fruit or vegetable grower does not. Market competition and transparency, is however, critical for all agricultural commodities.
Last year, the Commonwealth, State and Territory Ministers for Consumer Affairs agreed that the Commonwealth would lead a public consultation on proposed reforms to address unfair trading practices in the Australian Consumer Law on behalf of the states and territories.
This Consultation Regulation Impact Statement (RIS) is seeking feedback on policy options, including their possible costs and benefits. The Consultation RIS also provides an overview of how unfair trading practices are currently regulated, identifies issues for consumers and small businesses posed by gaps in existing protections, and provides a preliminary impact analysis of the policy options being considered.
Feedback will be used to develop a Decision RIS which will identify a preferred regulatory response. A timeframe for publishing this important document has not yet been established but it is anticipated it will occur during 2024.
Queensland and Australia have some of the most efficient farming systems, highest environmental and accountability standards in the world. We need to value and prioritise buying our home grown produce and ensure farmers have a level playing field when it comes to market competition.
We need to make sure market concentration and hefty power imbalances are not used to squeeze more than what’s fair from farmers and consumers. With these two policy areas currently under review and with calls from industry continuing to block the proposed sale of two milk processing facilities to supermarket giant, Coles, it is clear that there is a lot of work to be done to achieve appropriate market conditions to ensure farmers and consumers are not disadvantaged. QFF continues to make representation on behalf of our members on this important issue.
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