ACCC’s ag focus hots up as bad business complaints rise

Agriculture sector complaints to the Australian Competition and Consumer Commission (ACCC) totalled 185 in the last six months of 2016 –  up from 137 in the year’s first half.

But the 15 per cent jump in calls to the ACCC doesn’t necessarily mean farming is beset with bad business behavior issues caused by a rising tide of rogue traders, bully-boy retailers or misleading advertisers.

Last year marked the first full year of operations for the ACCC’s new agriculture unit.

It was established with 14 staff and extra government funding support to specifically pay attention to business competitiveness issues in the diverse agriculture industry.

“The ACCC’s role is becoming a more familiar to more people who in turn are also becoming more aware of the options they have to voice concerns about business behavior,” said agricultural commissioner Mick Keogh.

“At this stage it’s hard to know if there’s an increase in anti-competitive behavior or if the rise in complaints is a response to the more visible work we’re doing.

“I suspect it’s a response to greater awareness about the ACCC rather than an outbreak of bad behaviour.”

That said, however, Mr Keogh said the ACCC last year dealt with a number of grain marketer payment defaults on contracts, some notable delayed horticulture payment issues and launched its wide-ranging inquiry into the dairy industry after processors Murray Goulburn and Fonterra “clawed back” farmgate milk payments made early in the season.

It is also well into an inquiry into the competitiveness of cattle marketing and price transparency and it launched several Federal Court proceedings against egg producers who allegedly made false or misleading claims about their free-range status.

Mr Keogh, who also heads the Australian Farm Institute, was appointed a special commissioner a year ago to help guide the ACCC’s increased focus on farm sector issues and provide agriculture-specific insights into commission investigations.

He said one of the biggest hurdles the watchdog faced in its ag sector research was reassuring those making a complaint that their anonymity would be protected.

“It seems the number one concern among farmers or supply chain businesses is that by speaking out they’ll put future marketing contracts at risk or won’t be able to find a buyer for their produce.

The most frequent complaint theme for the 2016-17 year to date has been misleading conduct or false representations, with the ACCC receiving 81 notifications in that category –  about 25pc more than in the full 2015-16 year.

Misuse of market power complaints have increased from three to five and exclusive dealing allegations are up from four to nine, however claims of unconscionable conduct are down marginally to six, so far.

Mr Keogh said greater awareness of the ACCC’s agribusiness focus had also triggered a rise in inquiries from commodity processors and marketers checking their current or proposed market contract plans or systems were not anti-competitive.

ACCC investigations had also led to some big grain companies “quietly” altering or abandoning anti-competitive practises before legal action was initiated.

Australia-wide most business complaints to the ACCC come from enterprises with fewer than five staff, some of which are farming operations.

About 61pc of the almost 7000 business complaints and inquiries in the six months to December 31 came from so-called micro firms, while small businesses with fewer than 20 workers represented a further 28pc.

Mr Keogh said despite the public perception of the ACCC’s role being mostly about keeping big business behaviour in check or adjudicating on the competitive merits of big takeover deals, there was growing recognition that small business dealings with other small businesses, or big businesses, were significant.

In the case of agriculture he said two-plus decades of changes away from regulated commodity marketing systems had left farmers more exposed to market behavior.

In some cases producers were only now trying to change or challenge the deregulated marketing systems which had lately evolved and they needed ACCC intervention to get a better outcome.

In the dairy industry’s case, some deregulated milk marketing arrangements and rules still resembled their strict co-operative marketing origins of 100 years ago.