Overview

The Competition and Consumer (Price Inquiry— Perishable Agricultural Goods) Direction 2020 was introduced under section 95H of the Competition and Consumer Act 2010. This Direction mandates the Australian Competition and Consumer Commission (ACCC) to conduct a price inquiry into the markets for the supply of perishable agricultural goods, such as meat, eggs, seafood, dairy products, and horticulture goods. The objective of this inquiry is to support the government's commitment to ensuring that appropriate domestic policy settings are in place to foster growth in the Australian agricultural sector. Specifically, the inquiry will focus on identifying imbalances in market power along the supply chains of perishable agricultural goods and any adverse outcomes for market participants, as well as assessing the effectiveness of the Competition and Consumer (Industry Codes—Dairy) Regulations 2019. The ACCC has been directed to recommend options to enhance competition in these markets, with a report due by 30 November 2020. This Direction is consistent with human rights, as detailed in the Statement of Compatibility with Human Rights provided in Attachment A.

Scope and Application

The Competition and Consumer (Price Inquiry— Perishable Agricultural Goods) Direction 2020 applies to the Australian Competition and Consumer Commission (ACCC) and its Chairperson, mandating the ACCC to conduct a comprehensive price inquiry into the markets for the supply of perishable agricultural goods. This inquiry is directed to examine imbalances in power within supply chains for products such as meat, eggs, seafood, dairy, and horticulture goods, aiming to identify any harmful outcomes for market participants. The scope of the inquiry does not extend to the Competition and Consumer (Industry Codes—Horticulture) Regulations 2017, but it does focus on assessing the effectiveness of the Competition and Consumer (Industry Codes—Dairy) Regulations 2019 and recommending options for enhancing competition. The inquiry will consider confidential written submissions and is required to submit a report to the Treasurer by 30 November 2020. The Direction is a legislative instrument under the Legislation Act 2003, and while it is not disallowable and does not have a sunset clause, it is not subject to disallowance and continues indefinitely.

Key Provisions

The main operative sections of the Competition and Consumer (Price Inquiry— Perishable Agricultural Goods) Direction 2020 (the Direction) are found in Part 2, which provides the terms of reference for the inquiry (section 4). The Direction mandates the Australian Competition and Consumer Commission (ACCC) to hold a comprehensive price inquiry into the markets for the supply of perishable agricultural goods, which include meat products, eggs, seafood, dairy products, and horticulture goods (section 4(1)(a)). The inquiry must assess imbalances in power along the supply chains for these goods and identify any harmful outcomes for market participants (section 4(1)(b)). Additionally, the inquiry will evaluate the effectiveness of the Competition and Consumer (Industry Codes—Dairy) Regulations 2019 and recommend options to enhance competition in the market, including potential amendments to these regulations (section 4(1)(c)-(d)). The Direction imposes several obligations on the ACCC. Firstly, the ACCC is required to conduct a thorough inquiry into the specified markets for perishable agricultural goods (section 4(1)). This includes gathering information on the power dynamics within supply chains and any negative impacts on market participants. The ACCC must also consider the effectiveness of the current regulatory framework, specifically the Dairy Industry Codes, and propose recommendations to improve market competition (section 4(1)(c)-(d)). Furthermore, the ACCC must allow for confidential written submissions to be made to the inquiry, ensuring a comprehensive analysis of the issues at hand (section 4(2)). The ACCC is mandated to submit a report to the Treasurer by 30 November 2020, detailing its findings and recommendations (section 4(3)). Under the Direction, there are no explicit offences or penalties outlined for non-compliance with the inquiry process. However, the failure to comply with the requirements of the Direction, such as not conducting the inquiry or not submitting the report by the specified deadline, could lead to potential consequences under the Competition and Consumer Act 2010. The Act provides for civil and criminal penalties for non-compliance with its provisions, including fines and imprisonment. For instance, section 127 of the Act imposes penalties for failure to comply with a direction made by the Minister under section 95H, which could include significant fines for both individuals and corporations. Additionally, the Act's general provisions for non-compliance with its requirements may also apply, leading to further civil or criminal consequences.