Farm Tender

Shining the light on power imbalances in food supply chains

Advocacy group Dairy Connect today welcomed the Federal Government’s announcement of an Australian Competition and Consumer Commission inquiry into ‘harmful imbalances’ in the national food supply chain.

The inquiry will examine anomalies in bargaining power between farmers, processors, distributors, retailers and other stakeholders in domestic supply chains for perishable agricultural goods in Australia.

Dairy Connect CEO Shaughn Morgan said his organisation strongly supported the Federal Government initiative which would shine a light on power imbalances in food supply chains including dairy.

“From our perspective, this is a great initiative from the Federal Government,” he said.

“The ACCC will not be seeking to set prices but will be critically examining behaviours between key parties in the supply chain.

“This was in the announcement today by the Federal Treasurer Josh Frydenberg and the Agriculture Minister David Littleproud.

“We believe dairy producers are in an invidious position at the bottom of the supply chain and any light that can be shone on attitudes and activities will be most welcome.

“The inquiry will also examine whether the Dairy Mandatory Code needs to be enhanced or strengthened to ensure additional protection within the dairy supply chain.

“This will include whether an all-encompassing Agricultural Code may be required to ensure balance in the supply chains for a range of commodities.

“Dairy Connect will make a submission to the ACCC inquiry which is to focus on the interests of Australian consumers and how the impact of bargaining power-imbalances can affect them, without forgetting the vital role that dairy farmers play to ensure food security for all Australians 24/7.”

The Commission is scheduled to provide its report to the Government by 30Novemberthis year.

The Government was directing the ACCC to examine the nature of bargaining power in the supply chains for perishable goods including meat, poultry, seafood and horticulture goods not already covered by a mandatory industry code, the Ministers said.

The inquiry would examine whether imbalances in bargaining relationships existed and the extent to which these imbalances could be addressed through existing regulations.

The ACCC would be provided with the power to seek evidence, documents and information from businesses within the domestic supply chains to assess if there were harmful bargaining power imbalances occurring.

The Commission is scheduled to provide its report to the Government by 30 November this year.