The ACCC invites submissions regarding bargaining power in supply chains for perishable agricultural products in Australia.
The direction and terms of reference are available at: Competition and Consumer (Price Inquiry—Perishable Agricultural Goods) Direction 2020.
Outline of issues
The ACCC welcomes your views and ideas on:
- how the relative bargaining power of farmers, processors and retailers involved in supply chains for perishable agricultural goods affects trading practices which can, in turn, affect the efficient operation of these markets. The ACCC invites submissions regarding markets for meat products (pork, beef, lamb, chicken), fish and shellfish, eggs, dairy products, and horticultural and viticultural produce.
- possible options to address any issues or concerns you raise in your submission. Please summarise the issue, identify any harm you believe it causes, outline any suggestions for addressing the issues and give your reasons for this.
- the potential impact of any such suggestions on the ability of Australian suppliers to compete in global markets for perishable agricultural goods.
In preparing your submission, you may wish to particularly comment on the:
- relative bargaining power of the suppliers at each level of the domestic supply chain (i.e. farm, processing/manufacturing, retail)
- concentration of suppliers at each level of the domestic supply chain
- nature of the relationships between suppliers at each level of the domestic supply chain
- risks faced by suppliers at each level of the supply chain, the sources of these risks and the options for dealing with them
- practices and behaviours of buyers of perishable agricultural goods and the effect these have on issues such as:
- the incentives for growers to invest in farming and supply of these goods, or for processors to invest in manufacturing, product quality and innovation
- the wholesale prices negotiated
- the prices or quantities of goods supplied to consumers.
As part of the inquiry, the ACCC has also been asked to examine issues specific to the dairy industry. Specifically, the terms of reference ask the ACCC to examine:
- The effectiveness of existing regulation, including the Competition and Consumer (Industry Codes—Dairy) Regulations 2019 (Dairy Code) in addressing bargaining power imbalances throughout relevant supply chains.
- The cost of producing milk in different parts of Australia and the extent to which this is taken into account by participants at other levels of the supply chain.
The inquiry will not review the Commonwealth policy that there is to be no regulation of prices in the markets for the supply of perishable agricultural goods. Further, the inquiry will not review the operation or scope of the Competition and Consumer (Industry Codes—Horticulture) Regulations 2017.