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Friday, 3 December 1965

Mr CONNOR (Cunningham) .- In reply to the Attorney-General I should like to quote the balance qf the letter of 25th November from the Western Australian Automobile Chamber of Commerce. At page 2 of that letter the comment is made - if the Government is sincere that the Trade Practices Act is to be used as a medium for preventing this type of practice-

This is the T.B.A. agreement - then an example of how the proposed alteration would affect the situation in the motor trade would probably serve as an example as to how innocuous the Act would become as far as preventing full line forcing in all realms of industry.

Mr Snedden - I apologise for interrupting, but may I say that full line forcing is a set of words which has no precise meaning? Those words can mean the full line forcing by an individual of his own product. Some people use the term in the sense of full line forcing of their own products and some other person's products. The honorable member will need to make clear what he means by the expression.

Mr CONNOR - I know that the term has quite a number of applications and that there are a number of different ways in which the words can be used. But the point is this, and I continue from the same letter -

In explanation we would point out that if a person (in our industry, an oil company) provides money or credit-

This is something quite distinct from the question of leasing - then they evidently exempt themselves from their exclusive dealing arrangement being classed as a restrictive trade practice. The situation of course is that every petrol retailer in the Commonwealth receives credit from one or another of the oil companies. This is standard commercial practice in all fields of industry with the account being settled each month or so and new credit immediately being extended. Surely on this premise that credit has been extended the oil industry in this case is not going to be permitted to carry on and extend a restrictive trade practice which not only adversely affects the business freedom and operation of the retailer but which directly loads the consumer with additional cost.

This legislation does not deal merely with the existing T.B.A. agreements in association with premises owned by petrol companies; it goes further in paragraph (b) and deals with such matters as the grant of credit. The honorable member for Moreton (Mr. Killen) mentioned a mortgage. A mortgage is related, of course, to some measure of security over freehold or chattel goods with equity of redemption remaining in the mortgagee, but in this particular case any manufacturer who chooses to grant credit can then impose certain restrictions.

That is quite an innovation. The AttorneyGeneral mentioned that the owner of a freehold could dispose of his property by lease and create certain conditions. It could go further than that. An ingenious manufacturer or member of a cartel could himself obtain from the owner of a store a lease, because it is provided in paragraph 6 that " lease " includes a sub-lease and that " owner " includes the holder of a lease. In other words, the owner can be in fact a lessee and that lessee could in turn sublease to someone else. So if any manufacturer wants to tie up a retailer who owns a store all he has to do is to say to that retailer: " Give me a lease of just a small portion of your premises " - it could be a part where a set of shelves or a counter is installed - " I will then sub-lease that to one of your employees. He can sell these goods that I am producing, which are to be sold at a fixed price, and he can make his own arrangements with you." This is capable of infinite application. In other words, this amendment provides the whole pattern for evasion of this legislation on the widest possible scale.

I come now to what the Attorney-General said on the question of the interpretation of the passage: " term or condition being imposed or to be imposed in pursuance of an agreement with a person carrying on the business other than the person on whom the term or condition is or is to be imposed ". Obviously any person who is in the position of vertically supplying goods to a retailer could avail himself of that provision. He could go further, Where there is a cartel, where there is collective retail price enforcement, any one member of the cartel, after secret collusion with his comembers, could then enter into an arrangement of this type, and there does not have to be anything in writing whatever. It has infinite application. I say it is a masterpiece of evasion.

Amendment agreed to.

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