ACCC authorises industry code to restrict manufacture of illegal amphetamines

The Australian Competition and Consumer Commission has issued a decision authorising* a code aimed at preventing common cold and cough medicines being obtained by backyard laboratories for the manufacture of amphetamines or ‘speed’.

"This code is one of several initiatives developed in recent times by governments, law enforcement agencies and the self medication industry to address the growing problem of the backyard manufacture of speed using commonly available over the counter cold and flu decongestants", ACCC Chairman, Mr Graeme Samuel, said today.

The code has been developed by the Australian Self-Medication Industry whose members supply 98 per cent of all non-prescription pseudoephedrine-containing medicines sold in Australia. It requires suppliers of these products to monitor and report to law enforcement agencies all sales of stocks to pharmacies so that trends and patterns in sales can be traced. Suppliers will also be required to limit pack sizes and promotional activities and support pharmacies in holding minimal stock weights of pseudoephedrine-containing products.

The initiatives proposed under the code will also assist pharmacies in safely and securely managing their stocks of these products to minimise the potential for stock to be stolen.

Without ACCC authorisation some potentially anti-competitive provisions of the code would not be immune from action under the Trade Practices Act 1974.

"The ACCC granted interim authorisation to the code earlier this year. This allowed the code to be implemented on a short term basis while the ACCC considered the merits of the application.

"The ACCC has accepted that the code, along with other initiatives developed by government, law enforcement agencies and the pharmaceutical industry, will contribute to a reduction in the illicit diversion of pseudoephedrine-containing non-prescription medicines for the illegal manufacture of amphetamines.

"The ACCC does not consider that the code will unduly inhibit competition between signatories to the code or between signatories and other competitors in the market. Nor does it consider that restrictions on supply resulting from implementation of the code will unduly impact on lawful users of these products".

The code was supported by all law enforcement agencies and government health departments who provided comments as part of the ACCC's public consultation process prior to reaching its decision.

The ACCC also has a role in endorsing effective industry codes of conduct that aim to achieve best practice within an industry. The endorsement process is quite distinct from the authorisation process. Authorisation only indicates that a code passes the legal test set out in the Act (that the ACCC is satisfied that the public benefit arising from the conduct outweighs any competitive detriment). Authorisation does not indicate that a code is best practice and, this authorisation can in no way be held out as endorsement or approval by the ACCC of the code.

*The Trade Practices Act 1974 prohibits certain forms of anti-competitive agreements including agreements between competitors which limit their ability to deal with who they choose or on the terms they choose (including price). Authorisation provides immunity from court action under the Act arising from certain anti-competitive agreements. Authorisation can only be granted where the ACCC is satisfied that the public benefit arising from the conduct outweighs any competitive detriment.