Australia’s competition watchdog will oversee a new code of conduct for the country’s dairy industry when it is introduced next year following a key government recommendation.
Minister for Agriculture, Bridget McKenzie, announced the mandatory dairy industry code today (13 December). The ACCC will be responsible for enforcing the regulation when it comes into practice on 1 January, with a review of its effectiveness to take place 12 months later.
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The code came to fruition after former treasurer Scott Morrison asked the ACCC to conduct an inquiry in 2016 covering the competitiveness of dairy prices, trading practices and the supply chain. From that inquiry, which concluded in April 2018 there were “significant imbalances in bargaining power at each level of the dairy supply chain”, came the recommendation for a code of conduct.
Mick Keogh, the ACCC’s deputy chairman, explained: “Our dairy inquiry identified that imbalances in bargaining power between processors and farmers has allowed processors to transfer much of their risk onto farmers. We also identified a lack of transparency in contract and pricing practices, limiting the ability of farmers to compare offers from different processors and hence reducing competition.
“We concluded that a mandatory code was the best way to address these systemic industry problems.”
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By GlobalData
