The Australian Competition and Consumer Commission has issued a draft determination proposing to deny authorisation to British American Tobacco, Imperial Tobacco, and Philip Morris (the tobacco companies) to jointly stop supply to retailers or wholesalers they believe are supplying illicit tobacco.
The ACCC considers that having the three dominant tobacco companies working together, sharing information, and making decisions about whether or not to supply particular retailers raises competition concerns.
“The ACCC is concerned about the potential for the sharing of information broadly, and that, for example, the proposed arrangements could be used to selectively target retailers that stock competing brands. This could result in detriment to businesses that may be wrongly or mistakenly subject to a joint decision of the applicants to cease supply, without any opportunity for independent review of that decision,” ACCC Chairman Rod Sims said.
These three tobacco companies are the major suppliers of legal tobacco products in Australia. They have proposed the arrangements to reduce the supply of illicit tobacco in Australia.
“While we agree that reducing illicit tobacco sales is in the public interest, we are not satisfied these proposed arrangements would reduce trade in illicit tobacco sufficiently to offset the likely detriments,” Mr Sims said.
The ACCC expects to release its final decision in February 2017.
Further information about the application for authorisation is available on the ACCC Authorisations Register.