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NFF reiterates support for effects test

22 February 2016

The National Farmers’ Federation (NFF) has today reiterated its support for strengthening Australian competition law as the Federal Government approaches making a decision on the inclusion of an ‘effects test’ within section 46 of the Competition and Consumer Act 2010 (CCA).

NFF President Brent Finlay, speaking following the rekindling of debate surrounding the ‘effects test’ triggered by comments made by Deputy Prime Minister and Minister for Agriculture Barnaby Joyce over the weekend, said the organisation supported open and transparent marketplaces that facilitated high levels of competition within supply chains.

“Under the current provisions designed to prohibit the misuse of market power there continues to be difficulties in demonstrating the purpose of commercial conduct, largely due to the fact it involves a subjective enquiry,” Mr Finlay said.

“Demonstrating the effect of anti-competitive behavior is less difficult because it is based on a less subjective approach and a more objective examination of the impact on the competitive process.

“To this end, the NFF supports the implementation of the full Harper Review recommendations.

“By no means do we view the ‘effects test’ as a silver bullet solution but rather just one tool in a number of measures which have potential to improve competitiveness.”

Mr Finlay said effective competition legislation was particularly pertinent to agriculture given the sector was largely made up of small to medium businesses in remote areas with limited access to market information combined with the length and complexity of agricultural supply chains.

“These market factors result in potential imbalances between participants in the supply chain and where anti-competitive behavior is leveraged off this imbalance there may be a substantial impact on competition that may be difficult to clearly distinguish from legitimate business conduct,” he said.

“Hence it is important that in supply chains such as agriculture, where greater opportunities exist for firms with substantial market power to take undue advantage of others, an appropriate tool is available to protect the overall competitive process.

“This is not small business versus big business but rather a protection of the competitive process that will help drive innovation and productivity across agriculture for the benefits of all in the supply chain.”

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