Last week the ACCC recommended economy-wide regulatory change after investigating fresh produce supply chains.
The three-month inquiry found harmful power imbalances were rife between farmers, wholesalers and retailers.
ACCC deputy chair Mick Keogh said following the inquiry, the ACCC would be investigating unfair contract terms in the chicken meat industry and reports of horticulture wholesalers breaching the Horticulture Code.
“In most perishable agriculture goods markets there are many farmers but few processors or wholesalers, and even fewer major retailers,” Mr Keogh said.
“This makes farmers particularly vulnerable to issues stemming from limited competition at the wholesale or retail level.
“In addition, the more perishable a product is, the weaker the farmer’s bargaining power often is.”
The ACCC’s Perishable Agriculture Goods Inquiry Report recommends the introduction of an unfair trading practices prohibition, the strengthening of the small business unfair contract term protection and giving the Food and Grocery Code of Conduct teeth.
National Farmers’ Federation chief executive Tony Mahar called on the Federal Government to urgently implement all recommendations from the ACCC’s inquiry.
“I have heard countless examples from our horticulture growers of buyers using short notice cancellations to exploit growers and drive down prices,” Mr Mahar said.
“Once the farmer has picked and packed the produce, they get a phone call from the supplier stating they are cancelling the order, in the same breath they make a ‘new’ order for the same produce at 30 to 40 per cent discount. This is outrageous.”
NSW Farmers vice-president Xavier Martin said the report and the Federal Government’s response could lead to positive change for dairy, poultry and horticulture farmers.
“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.”
Mr Martin said he was also pleased by the ACCC’s commitment to investigate non-compliance by horticulture wholesalers within the Horticulture Code.
NSW Farmers as a whole welcomed the ACCC’s recommendations, saying the findings validated farmer concerns.
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