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Monday, 30 August 2004
Page: 26750

Senator O'Brien asked the Minister representing the Treasurer, upon notice, on 25 September 2002:

(1) Does the Australian Competition and Consumer Commission (ACCC) investigate instances of profiteering in relation to grains, fodder and other livestock animal feeds; if so, how many instances of profiteering in relation [to] grains, livestock and other livestock animal feeds have been investigated in each of the past 10 financial years.

(2) How many prosecutions have been obtained in each of the 10 financial years for profiteering from grains, fodder and other foodstuffs used as livestock feed.

(3) How many convictions have been obtained in each of the past 10 financial years for profiteering from grains, fodder and other foodstuffs used as livestock feed.

(4) What are the current penalties for profiteering from grains, fodder or other foodstuffs used as livestock feed.

(5) Have these penalties changed within the past 10 years, if so, can details of these changes be provided.

Senator Minchin (Minister for Finance and Administration) —The Treasurer has provided the following answer to the honourable senator's question:

(1) The ACCC has examined its records of complaints and inquiries between 1993-94 until 2003-04. Over this 10 year period there were 14 complaints about escalating prices of grains, fodder and other livestock animal feed.

Some of these complaints related to feed suppliers packaging feed in smaller quantities but continuing to charge the price previously charged for a larger quantity.

Other complaints were that feed suppliers were taking advantage of drought conditions to increase prices. In each instance, preliminary inquiries suggested that the pricing issue raised by each complainant was not related to any breach of the TPA.

In certain situations, such as during drought, severe shortages of grains, fodder and other livestock animal feed can arise and it would be expected that prices would increase as a result of restricted supply.

During the 10 year period examined by the ACCC, an additional 10 complaints or inquiries were received about the application of GST to feed supplies.

In each instance preliminary inquiries suggested that suppliers had not breached the price exploitation provisions of the TPA that had been introduced specifically for the period in which the GST was to be implemented.

More generally, during this 10 year period, 23 complaints and inquiries were received about feed suppliers. These were in relation to:

GST exclusive advertising by feed suppliers;

Refusal to supply by feed suppliers; and

Suspected price-fixing between feed suppliers.

Preliminary inquiries by the ACCC found that these complaints and inquiries did not raise TPA concerns.

(2) It is not possible for the ACCC to prosecute any party that increases prices in the absence of evidence that a breach of the TPA has occurred. There have been no prosecutions of feed suppliers in relation to price or other issues during the 10 year period 1993-94 and 2003-04.

(3) N/A.

(4) Making a profit is not unlawful. However, a breach of the provisions of the TPA prohibiting anti-competitive conduct can attract significant penalties, including penalties of up to $10 million for companies and $500,000 for individuals. It is also possible for a Court to order that damages be paid to affected parties.

A breach of the TPA provisions that prohibit unconscionable conduct can lead a Court to make orders that include recision, variation or specific performance of a contract. Damages could also be awarded if a feed supplier had acted unconscionably towards a farmer.

(5) The penalties in relation to breaches of anti-competitive provisions of the TPA were increased in 1993 to provide penalties from $250,000 up to $10 million for corporations and from $50,000 up to $500,000 for individuals.

In 2001, the TPA was amended to allow a Court to issue probation orders, community service orders and corrective advertising orders for breaches of provisions that included unconscionable or anti-competitive conduct.