Dairy

Effects test welcomed

By Country News

Australian Dairy Farmers has applauded the introduction of an effects test by the Federal Government, designed to strengthen competition across the grocery supply chain.

The ADF has advocated for the change since 2011. The provision, which will be included in section 46 of the Competition and Consumer Act 2010, will address the current unequal distribution of market power and encourage transparency to the benefit of producers, consumers and retailers.

ADF president Simone Jolliffe said she looked forward to working with the government to ensure the legislation prevented firms with significant market power from engaging in conduct that had the purpose, effect or likely effect of substantially lessening competition.

‘‘The effects test is another tool to help provide integrity and transparency regarding the impact of retailer actions on suppliers,’’ Mrs Jolliffe said.

‘‘In conjunction with the government’s introduction of the Food and Grocery Code, which included a large number of ADF’s recommendations, this is a constructive step towards fostering a more competitive business environment.

‘‘Further, the appointment of Mick Keogh as the Australian Competition and Consumer Commission’s first agricultural commissioner and an Agricultural Engagement and Enforcement Unit, highlights that the government is committed to strengthening competition across the supply chain.’’

Mrs Jolliffe said the reforms would support consumers’ interests as well as dairy farmers’.

‘‘Moving towards a more objective measure to assess the impact of anti-competitive behaviour will build a more open and transparent marketplace.”

The ADF is hopeful this will assist in preventing damaging practices, including predatory pricing in the future.