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Thursday, 16 August 2012
Page: 5537


Senator XENOPHON (South Australia) (12:40): It was a real pleasure to serve on this committee and I am grateful to Senator Richard Colbeck as chair who proposed this inquiry, which has been a very important and valuable inquiry. I also thank Richard Grant and the team of the secretariat—they have done a terrific job in supporting us in relation to the work of this inquiry. I have provided a minority report—it is not so much a dissenting report—to add a number of recommendations, and I will run through those very quickly in the limited time available.

There is a crisis in our food processing sector. It is a sector that has so much potential. It is a sector that needs support, and I do not think that it is getting that support now. There is a whole range of measures that need to be dealt with. We need to deal with issues such as food labelling. We do not have truth in food labelling in this country, and that will make a real difference. Australians want to buy Australian produce. They want to have that choice. They want to make an informed choice from the supermarket shelves, and currently our food labelling laws are positively misleading. That needs to be addressed.

There is also an issue of the market duopoly we have seen in the grocery market with Coles and Woolworths. We saw what Master Grocers Australia said just a few days ago and we heard evidence—and I will be careful in my choice of words—that could not be published that raised concerns on the part of food processors. I think it says it all. When Lateline did a story about the work of this inquiry about the food processing sector, they approached over 100 food processors and not one was willing to come forward to speak on camera. In fact, one did, but pulled out at the last minute. That says that there is a real issue. It is not because Coles and Woolworths are intrinsically bad people; it is a function of the market. They have so much market share, so much market power, that it is unhealthy in terms of a competitive environment. That is why in my minority report I say that we need to go down the path of giving the courts a divestiture power where there is a proved abuse of market power. I think we actually need to look at that and it is something that I want to do more work on.

There are also issues raised in terms of unfair contract terms. We heard a lot of evidence about how terms appear to be unilaterally changed and how some producers and food processors felt they could not raise an issue about that because they relied so heavily on one or both of the big two supermarkets. That is a big issue and I think it needs to be dealt with. What is very telling is that so many food processors and farmers are saying that they do not want their kids to be involved in this business because it just is not worth it.

But there are real glimmers of hope in this industry. The produce and the quality that is produced are second to none and we need to encourage that. We need to look at our free trade agreement with New Zealand in terms of what 'product' actually means in New Zealand. That needs to be scrutinised, because the concern is that we are getting foreign goods, purported to be New Zealand goods, as part of the CER, and I think we need some greater clarity and transparency in relation to that.

Australian consumer law needs to provide greater protection for suppliers who have suffered detriment after making a complaint to the ACCC. In other words, if somebody is a whistleblower, they need to be protected. There needs to be a reverse onus of proof, in a sense, so that if they do suffer detriment it is up to the supermarket chain to show that it had nothing to do with their complaint. These are just some of the matters that need to be dealt with.

The issue of the dominance of the big two is important but there are other issues in terms of productivity. I am glad that the government had a review of the Fair Work Act. I supported the abolition of Work Choices, but I am worried that the pendulum has swung too far in some cases, particularly for small businesses in this country, and that is why I introduced a bill earlier today. I do not want to see a return to Work Choices but we need to acknowledge that small businesses in this country are doing it tough and that those small food processors that are the future of this industry in terms of innovation and quality are suffering, and they need to have some flexibility where they can pay fair wages but have the ability to survive in an increasingly globalised market.

Madam Acting Deputy President, I seek leave to continue my remarks later and I hope that other members who participated in this inquiry can make a contribution as well. It was, again, a very worthwhile inquiry and I congratulate the mover and the committee for their work.

Leave granted.

Debate interrupted.