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Friday, 3 December 1965

Mr CONNOR (Cunningham) . - This amendment bristles with possibilities for the evasion of the whole spirit and purpose of the Bill. Perhaps one could characterise the amendment as what a middle-aged woman would call a menopause child - a little afterthought on the part of the Government. If I might pursue the metaphor further, I can say that the amendment is pregnant with possibilities, particularly in relation to petrol and brewery combines and to quite a wide category of interest which would be seeking ways and means to avoid the provisions of this legislation. To begin with I propose to deal with tyres, batteries and accessories. These T.B.A. agreements as they are commonly called relate to single brand petrol stations. The practice is well established throughout Australia.

I am glad that the Minister for the Navy (Mr. Chaney) is seated at the table because I have with me a letter of 25th November 1965 which was circulated amongst honorable members from Western Australia and passed on to me. It contains bitter complaints by the Western Australian Automobile Chamber of Commerce against the introduction of the new amendments. Reference is made in the letter to a conference which was held at the time that Sir Garfield Barwick was Attorney-General. The present Minister for Shipping and Transport (Mr. Freeth) and the present Minister for the Navy were in attendance. At that meeting representatives of the motor industry - particularly petrol station resellers - put their case in opposition to what is known as " full line forcing ". It is bad enough for the Government not to be legislating to prevent full line forcing but for it deliberately, and in the most calculated way, to sanction full line forcing as the result of the last minute approach of an interested concern, is, I think, more than the people of Australia should be asked to accept.

The T.B.A. agreements in relation to tyres, batteries and accessories work in this fashion. An oil company in a dominant position insists on its tenants and other nations tied by contract dealing with certain other suppliers such as a specified tyre company or battery manufacturer. In return for access to this section of the retail market, the tyre company pays the oil company a commission on sales made at the company's one brand service station. The simple fact is that the commission must either be taken out of the retailer's profit, loaded against the consumer's price, or perhaps a little of both. The organisation in Western Australia apparently speaks for some 1,200 motor traders. It voices their concern and opposition in the most stringent terms. After outlining its reasons, and in particular referring to reports which it had given to the Government in respect of similar T.B.A. investigations by committees of inquiry in Canada, Western Australiaand, of course, in relation to the antitrust laws in the United States - the organization cites the committee of inquiry into solo one brand petrol marketing in the United Kingdom. After in every case citing adverse recommendations against the continuance of this kind of retailing the Automobile Chamber of Commerce say -

For this reason we respectfully but urgently ask you to review the matter of this proposed amendment as it appears this legislation from its original concept is gradually but surely being whittled away to the stage where rather than preventing restrictive trade practices it will impede the progress of small business units in the community without making any attempt to control big business in its individual or collective capacity.

When asked a question by my colleague, the honorable member for Newcastle (Mr. Jones), the Attorney-General suggested that tyres might not be covered. But I suggest most emphatically that tyres would be covered because, in the particular amendment - sub-clause (2b.) paragraph (a) - specific reference is made to a grantee being required to acquire from the owner, or if the owner is a corporation, from a related corporation. The essence of this form of trading is for a petrol company not merely to build its own retail service station and appoint a reseller to sell its brand of petrol, but also to enter into very definite arrangements with tyre and battery manufacturers and manufacturers of motor accessories. The relationships are too well known for me to labour them. Honorable members are aware of the particular groupings of these companies. It might be said that every major petrol company in Australia today is associated with a tyre manufacturer and also with a manufacturer of accessories, and so on right down the line. This practice is being perpetuated by this amendment.

The same can be said in relation to breweries. Anyone who is familiar with the security documents which are required in any tied house agreement between the lessee of a brewery hotel in New South Wales and a brewery company will be aware that it is necessary for the lessee to do everything short of mortgaging his soul or even his prospect of salvation. First of all, there is a mortgage of the leasehold. Then there is a bill of sale over the furniture, and a promissory note payable on demand for the amount of the lien.

There is also a specific tying agreement under which not only is the lessee bound to purchase the beer and other products of the brewery company, but also to purchase such goods as mineral waters, cigarettes and a number of other items.

Mr Devine - And spirits.

Mr CONNOR - And also spirits. That is another example of full line enforcement, one of the practices referred to at an earlier stage of this debate.

I refer now to an even more serious loophole; that is paragraph (b). As I read it, while members of, say, companies A, B, C and D cannot openly agree amongst themselves to impose this type of arrangement on a person by giving credit to one of their retailers, they can do so by a covert agreement specifically designed to perpetuate vertical resale maintenance. It would seem that any manufacturer who gave credit to his retail outlet could in perpetuity, or for so long as credit is given, continue that practice with complete immunity as far as other sections of this Act are concerned.

To take it even further, I refer to onebrand petrol stations. It is possible, within the limits of retail licences obtainable in the various States, to multiply the types of goods which might be sold. The arrangements might not be limited merely to petrol, tyres, batteries and accessories but could be extended to cover sporting goods, photographic materials and so on. Honorable members can see, by using their imagination, that there is no limit to the type of goods which might be drawn into such arrangements. I will reserve my comments on the granting of leases to a later stage of the discussion.

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