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Thursday, 3 November 2011
Page: 8176

Food and Grocery Industry

Senator XENOPHON (South Australia) (14:46): My question is to the Minister for Innovation, Industry, Science and Research, Senator Carr. I note Senator Carr's unambiguous statements to the Australian Food and Grocery Council yesterday relating to complaints brought to him over the conduct of Coles and Woolworths by many local firms. To quote Senator Carr, 'On the basis of the claims put to me, there is a case to be concerned about an abuse of market power.' However, the new Chairman of the ACCC, Rod Sims, is today reported as indicating that the ACCC may not have the powers to deal with the matters raised by Senator Carr, saying that, in relation to the provision on the misuse of market power, 'It is probably the hardest part of our act to enforce.' Does the minister consider the ACCC has sufficient powers to adequately deal with the abuses of market power brought to his attention?

Senator CARR (Victoria—Minister for Innovation, Industry, Science and Research) (14:47): I thank Senator Xenophon for his question. It is true that I have made statements in regard to the support for Australian grocery manufacturers. I have, in the time that I have had responsibility for food manufacturing, been in receipt of a steady stream of complaints and allegations of misuse of market power and unconscionable behaviour by our major supermarket chains. As a consequence of that, I have taken these complaints—given that they are from reputable firms, reputable organisations—up with the ACCC. I take particular comfort from the fact that the ACCC has indicated that they want to have a good look at these matters.

I am not judge and jury in these cases, Senator Xenophon, but I have said that we will be defending the interests of grocery manufacturers and the interests of manufacturing workers. These are clearly very significant questions. In regard to the position of Coles, I recall that in Senate estimates in October, ACCC Chief Executive, Brian Cassidy, said that supermarkets have been told to keep records of all products involved in the 'price down' campaigns that are currently being undertaken. The ACCC Chairman, Mr Sims, has indicated that he takes the view that the law has evolved in recent years in providing the ACCC with a clearer view of what is intended by section 46 and the misuse of market power to gain advantage. He has indicated that he takes the view that this is a matter that does need to be looked at to the full extent, using the full powers available to the ACCC. I am not going to prejudge what he— (Time expired)

Senator XENOPHON (South Australia) (14:49): Mr President, I ask a supplementary question. Does the minister agree with competition law experts, such as Associate Professor Frank Zumbo of the University of New South Wales, that the power of the ACCC to deal with such abuses of market power is severely constrained in the absence of a general divestiture power in the Competition and Consumer Act?

Senator CARR (Victoria—Minister for Innovation, Industry, Science and Research) (14:50): I have noted the remarks of the ACCC chairman in regard to these issues and he has publicly stated that is he is aware of the allegations that are being made about the abuses of market power and unconscionable conduct. He said that he would look into these matters very carefully. He has also indicated that he wants to encourage businesses who believe they have been victims of a breach of the Competition and Consumer Act to contact the commission directly and that there are extensive powers available to the commission to undertake its investigation, including its own information-gathering powers. We will wait and see what the ACCC say about the nature of its powers. We look forward to their report back on these issues. They have indicated in the past more than a willingness—in fact, in a statement made on ABC radio on 20 October, the ACCC chairman said that he was of the view that 'if we needed more power, we would be politely saying so'.

Senator XENOPHON (South Australia) (14:51): Mr President, I ask a further supplementary question. If I could assist the minister, this morning on Fran Kelly's program on Radio National, Mr Sims said: 'To prove misuse of market power we have to prove the supermarket has done this with the purpose, not just the effect, of damaging competition,' which the ACCC says is the hardest part of their job. Given the reality of the cases of abuse of market power brought to the minister's attention, does the minister agree that there ought to be a review of the Competition and Consumer Act to look at these issues?

Senator CARR (Victoria—Minister for Innovation, Industry, Science and Research) (14:51): The ACCC is the appropriate body to look at these questions. The allegations go to the issues of the auctioning-off of shelf space with regard to excluding competitors, the arbitrary rescinding of contracts with suppliers mid term and a series of other matters which, if true, I would have thought are unconscionable conduct. The question remains as to whether or not the ACCC is of that view, and we will look forward to their advice after they have had a look at it. But the key issue here is to encourage manufacturers to come forward with these issues and to rely upon the confidentiality of the ACCC to investigate this matter, and we will provide all possible assistance for that to occur.