Effects Test through the eye of the needle

By Brian Tessmann, QDO President

Small Business organisations and the people in small businesses themselves including dairy farmers around Australia have welcomed the announcement of the reintroduction of an effects test into the Competition and Consumer Act. This change to section 46 of the Act which has been strongly advocated for by both the Queensland Dairyfarmers Organisation (QDO) and Australian Dairy Farmers (ADF) will strengthen competition and give the ACCC stronger powers to pursue practices which effect competition. This is because actions will be judged not only by the claimed intent of an action but by whether in its effect or likely effect it will reduce competition. Thus reducing the relative impunity currently enjoyed by large companies in using their huge market power to unfairly damage their suppliers and/or their smaller competitors and so reduce their overall competition.

It was only two weeks before this announcement last week that QDO and ADF in alliance with a partnership of 21 industry associations, representing over 1 million businesses and employing over 5 million employees, visited Canberra to seek agreement from the Federal Government to implement an effects test. There they met with Deputy Prime Minister, Barnaby Joyce Treasurer, Scott Morrison and small Business Minister, Kelly O’Dwyer to once again advocate for change. QDO has been particularly vocal for this change as it should deliver benefits to Queensland dairy farmers. When considered in combination with other recent changes and developments including the appointment of Mick Keogh as the ACCC’s first Agricultural Commissioner and the supermarket code of conduct which although limited and only voluntary did include a number of our recommendations should all together help competition flow down the supply chain. In addition, the new unfair contract protection laws will be available to be used by the many of Queensland’s dairy farmers and many other small businesses. QDO and ADF are keen to see these new provisions in the act applied quickly to outlaw damaging practices such as predatory pricing. It really then will be up to the milk processors to negotiate better contract provisions with the supermarkets and the farmers collective bargaining groups and dairy co-ops to deliver that benefit back to farm gate.

The significance of this announcement cannot be underestimated as the powers of big business have been working overtime to stop it.

In achieving this commitment QDO thanks the Treasurer and the small Business Minister and particularly Deputy PM, Barnaby Joyce, Senator Matt Canavan and the National Party generally for their assistance and persistence.