In December the ACCC released the Perishable Agricultural Goods Inquiry Report (‘the Report’). The Report presents the findings of a three-month investigation into the markets for supply of meat, eggs, seafood, dairy and horticultural products. The inquiry focused on bargaining power imbalances at each level of the supply chain and the efficiency of current regulation. The Report found that several characteristics of the perishable goods industry lead to bargaining imbalances. For example, whilst there are many producers, market power is concentrated amongst only a few major processors and retailers. Harmful outcomes include a lack of transparency for producers, contract terms favouring processors and commercial retribution against suppliers who seek price increases.
The Australian Consumer Law (ACL) currently contains some relevant protections such as restrictions on unfair contract terms where one of the parties is a small business. However, the ACCC is recommending increased measures to protect producers. Steps are already being taken to expand the definition of small business under the ACL and make unfair contract terms unlawful. The ACCC has also introduced a class exemption to enable small businesses to join for collective bargaining, without breaching ACL. The exemption is set to commence in early 2021. However, the ACCC is of the view that to properly address the issues an economy-wide prohibition on unfair trading practices is necessary.
