Issues in agricultural machinery markets to be examined

28 February 2020

Concerns about manufacturer warranties and the servicing and repair of agricultural machinery are the focus of an ACCC discussion paper released today, along with an online survey seeking farmers’ feedback about their experiences.

Agricultural machinery: After-sales markets identifies a number of initial concerns relating to competition and fair trading issues, which the ACCC is seeking more information about.

“Agricultural machinery costs a lot to purchase and maintain. We are concerned by a number of issues surrounding the sale and servicing of agricultural machinery and want to better understand the extent of these,” ACCC Deputy Chair Mick Keogh said.

“A number of barriers, including warranty clauses, may be preventing farmers from using an independent business to repair or service their equipment. We hear that this can result in delays at critical times.”

The Australian Consumer Law provides certain rights when a consumer good breaks or fails to perform as expected.

However, these protections generally don’t apply to agricultural machinery and a purchaser’s recourse for faults is usually limited to the manufacturer’s warranty or paying for the repairs themselves.

“Manufacturers have significant discretion as to what warranty protections are offered and how they apply, and we’re concerned that farmers may not be aware of these limitations,” Mr Keogh said.

Additionally, most modern agricultural machinery has extensive data collection capabilities, but manufacturer policies on data ownership and management may raise privacy and competition issues.

“Production data becomes more valuable to a farmer the more they accumulate it, so the lack of any clear rights to this data may create a barrier to switching between brands of machinery,” Mr Keogh said.

“We want to hear about farmers’ experiences when purchasing and obtaining repairs to agricultural machinery, and encourage them to contribute to our survey,” Mr Keogh said. 

The survey is open until 5 April 2020. Interested parties can also make submissions via the ACCC consultation hub until 5 April 2020.

The ACCC will analyse information collected from submissions and the survey and will use this to determine its next steps.

Background

The ACCC began examining issues in agricultural machinery markets following the Australian Consumer Law Review in April 2018, and observations of a debate occurring in the United States relating to the repair of agricultural machinery.

Stakeholders expressed concern to the ACCC that agricultural machinery is frequently not covered by the Australian Consumer Law (ACL) guarantees, as it often costs more than the $40,000 threshold for consumer goods.

Release number: 
30/20
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