Australian Dairy Farmers (ADF) president David Basham has welcomed the introduction of the s46 ‘effects test’ legislation 2016 into Federal Parliament.
Mr Basham said the provision, which will be included in section 46 of the Competition and Consumer Act 2010, would address the current unequal distribution of market power.
It would encourage transparency, which would benefit producers, consumers and retailers.
“This will ensure that supermarkets and firms who enter into contractual arrangements which cause others in the supply chain to be adversely effected will now be captured for the first time by competition law,” Mr Basham said.
“The effects test is another tool to help provide integrity and transparency regarding the impact of retailer actions on suppliers.”
ADF had advocated strongly for the change since 2011, which it said it believed would assist in preventing damaging practices, including predatory pricing in future.
“The reforms will support consumers’ interests as well as dairy farmers by moving towards a more objective measure to assess the impact of anti-competitive behaviour,” said Mr Basham.
”The introduction of an effects test is in line with competition policy around the world – Australia has joined the clear majority of developed nations who already have established effects tests.”