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Senate Inquiry into market power and food prices: call for regional submissions.

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Senator John Cherry Senator for Queensland Australian Democrats spokesperson for Rural Affairs Press Release Dated: 3 Sep 2001 Press Release Number: 01/520 Portfolio: Rural Affairs

Senate Inquiry into market power and food prices: call for regional submissions

Democrats Rural Affairs spokesperson Senator John Cherry, campaigning in Toowoomba today, has urged regional Australia to have its say on Federal laws on market power in a new Senate Inquiry about to get under way.

Senator Cherry said the Inquiry, initiated by the Democrats and which has just called for public submissions, would look at key issues such as the widening gap between retail food prices and the prices paid to rural producers.

“There is a serious imbalance of market power in the food chain when farmers’ incomes are falling but food prices are rising faster than inflation,” Senator Cherry said.

“Whether this is because of the dominant market share of the big two supermarket chains or the high level of concentration and foreign ownership in Australia’s food processing industry needs to be investigated.

“The Senate Inquiry will be looking at whether the Trade Practices Act is adequate to deal with issues of misuse of market power. It will also look at whether the Australian Consumer and Competition Commission needs the power to order the breakup of dominant corporations, as occurs in the U.S.

“The Inquiry has the real potential to get to the bottom of the weak bargaining position of farmers and the decline in farm incomes this is causing.

“Official statistics I recently provided to the Senate show that the price of food has risen 6% faster than inflation since 1995, while farmer incomes have fallen.

“Milk prices rose 15%, but prices paid to farmers fell 11%; bread rose 17% but wheatgrowers returns fell 16%, lamb retail prices rose 10% but farmers’ returns fell 16%, fruit prices rose 17% but farmers’ returns rose just 3.,6%, vegetable prices rose 23.5% but farmers’ returns fell 9%, and egg retail prices rose 16.4% but farmers’ returns fell 13.5%.

“Clearly there is a serious market failure and the Senate needs to find out why and whether the laws dealing with the misuse of market power are adequate to ensure the fairest possible deal for consumers and farmers,” he concluded.

Senator Cherry will be discussing the impact of the current law and deregulation of the dairy and beef industries with experts in Toowoomba today. The Senate Inquiry, by its Legal and Constitutional Affairs References Committee, advertised nationally for submissions over the weekend, with submissions closing on October 30.