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Friday, 3 December 1965

Mr CREAN (Melbourne Ports) . - I would like to join with the honorable member for Cunningham (Mr. Connor) in expressing some disappointment at the inclusion of this clause in the rewritten Bill. The honorable member for Cunningham drew attention to such matters as one brand petrol stations and the ownership of hotels by breweries. I can accept as a matter of practical logic that if a brewery is allowed to own a number of hotels it is rather difficult to expect those hotels to sell any other product than the product that the brewery makes. I can accept as a matter of practical logic also that if petrol refineries are allowed to own distributing points it would be rather odd for those distribution points to supply other than the product that the refining company produces. What a lot of people hoped would be done by the legislation is that this nexus between manufacture and distribution would be broken. The inclusion of this clause in the Bill seems to imply that the Government has thrown its hands up in despair about the prospect of breaking such a connection. I would like the AttorneyGeneral to indicate the view of the Government on this point.

I understand that the Licensing Court in Victoria now frowns on the idea that those who manufacture beer should also own hotels.

Mr Snedden - No. If I might put the record straight - the view of the Licensing Court is not that breweries should not own hotels but that they should not be the licensees. That is a different thing.

Mr CREAN - The licence flows from the ownership of the property. No person can build a petrol station anywhere he likes. He has to persuade some local government authority that a particular corner should be removed from residential occupancy by half a dozen houses and turned into a petrol station. Once a local government body has decided to do that, that is not the end of it. A limited number of channels of distribution are available. The tendency is for one particular company to get hold of or monopolise a particular channel of distribution. The same situation applies with respect to hotels. A person cannot start a hotel anywhere he likes. A licence is issued which generally attaches to a particular site in a particular place. In my view, the one cannot be divorced from the other. I suggest that what can be done is to break the link between the brewery and the hotel; between the person who refines the petrol and the person who distributes it. I believe that this nexus is not permitted under American law. American law regards the person who manufactures a product as not being the person who ought to distribute it. I think this argument can be used against the " tied house " system. A brewery ought not to own hotels.

Mr Chaney - What if a brewery cannot find someone to take over a hotel?

Mr CREAN - It is all right to raise that sort of argument. I would not suggest that this practice ought to be outlawed. But it ought to be made examinable at least. The Government is not even doing that. It seems to me that in this clause the Government is shutting the door on doing anything about what in the public mind are obnoxious practices.

As my friend from Cunningham has suggested, it does not stop with the products 1 have referred to. Many of the breweries have links with wine and spirit manufacturers. Unless a hotel takes certain wines and spirits it cannot obtain beer from the brewery. The same situation exists with petrol stations, which seem to have attached to them certain brands of tyres, batteries and accessories. The honorable member for Cunningham referred to these as the T.B.A. - not to be confused with the T.A.B. in Victoria.

Mr Snedden - That does not come within the Bill.

Mr CREAN - No, and it seems to us that the other matter does not come within the Bill either. We certainly would be interested to hear the comments of the Attorney-General on this point. I would like to know whether the Government has any opinion about the suggestion that those who refine petrol should have nothing to do with the distribution of it or that the manufacturers of beer should have nothing to do with the properties from which that beer is sold. In my view, this is a dangerous link because a brewery, with a capitalisation of several millions of pounds, must be in a much more dominant position with regard to its tied channels than any single occupier of one of those channels can be.

We all know what has happened to many of the so-called one brand service stations. A tyranny has been exercised over the poor little battler who is making his own life on his own corner. He finds that, if he falls foul in any way of the very large enterprise that refines the petrol, his lot is not a very happy one. I would have thought that some honorable members opposite, who in this debate have been expressing ideas on behalf of some of the little battlers in the community, would be a little more alarmed about the implications that I can see in this clause. I would sooner see the Bill without this clause. I would like the Attorney-General to tell us why he intruded the clause. Has he any views on whether these vertical combinations between manufacturers and distributors of their products should be broken? In my view, they ought to be broken. I hope that he will express a view on that matter.

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