ACCC report backs competition advocacy for farmers

NSW Farmers welcomes the ACCC’s latest findings validating farmers’ concerns around power discrepancies in dairy, poultry meat and horticulture supply chains.

The ACCC’s three-month inquiry into trading practices in domestic fresh food supply chains follows long term concerns from farmers around the power imbalance they face against the big retailers and processors in the supply chain.

NSW Farmers Vice President Xavier Martin said the report and the Federal Government’s response could lead to positive change for farmers in these industries.

“We have known about competition failures impacting farmers for some time now, and this has formed a key pillar of our advocacy,” Mr Martin said.

“Dairy, poultry meat and horticulture farmers are bearing the brunt of supply chain inequities, whether that be due to disproportionate power at the retailer or processor level, or both.”

“The report contains recommendations for an economy-wide prohibition on unfair trading practices, strengthening of the Food and Grocery Code of Conduct, and for government and industry to improve price transparency in some industries.”

Mr Martin said it is promising to see the challenges facing poultry meat farmers gain recognition in this inquiry.

“In the poultry meat industry, the loss of competition at the processing level in NSW has left farmers with little to no bargaining power, which can result in them accepting contracts with unfair terms.”

“We’ve seen farmers unable to contract their sheds, making their million dollar investments redundant.”

“In response to this inquiry, the ACCC has indicated it will conduct further compliance activity with respect to alleged unfair contract terms in the chicken meat industry. It is hoped this will further highlight power imbalances and the need for a mandatory code for the whole poultry meat industry.”

“This comes after the national commitment made last month to make unfair contract terms unlawful and to enact harsh penalties for their use.”

Mr Martin said he is also pleased by the ACCC’s commitment to investigate non-compliance by horticulture wholesalers within the Horticulture Code.

“Despite price fluctuations at retail for fruit and vegetables, farmers see little flow on of profit.”

“We also acknowledge the commitment to improve price transparency under the dairy mandatory code of conduct. However, we remain concerned around retail pricing on fresh milk and other popular dairy items.”

“These conditions are no way for farmers to operate, and there are long-term implications for farmers, industries and consumers,” Mr Martin concluded.

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