4 January 2021Unaffordable home, contents and strata insurance is a major challenge to the liveability and prosperity of communities, towns and cities across northern Australia, but a range of actions could help address this, according to a major report published by the ACCC.
The final report of the ACCC’s three year Northern Australia Insurance Inquiry shows that home, contents and strata insurance premiums are, on average, considerably higher in northern Australia than the rest of the country, and over the past decade have increased at a faster rate.
Rising insurance costs are leading to higher rates of non-insurance in northern Australia, leaving more households and communities financially vulnerable to the impact of severe weather events, and potentially hurting the economic development of the region.
Insurers are increasingly assessing and pricing risk, based on a home or building’s individual characteristics and address rather than at a postcode or regional level, especially for cyclone or flood risk. This has resulted in very significant premium increases for some households.
“This inquiry has examined insurance in northern Australia in unprecedented breadth and detail, using an extensive volume of documents and data from insurers, and taking in significant information and feedback we have received from industry, local residents, consumer groups and communities across northern Australia,” ACCC Deputy Chair Delia Rickard said.
“We know that there are real reasons for more expensive insurance premiums in northern Australia. The risk of extreme weather is higher and it can be costly for insurers to service these regions. However, different insurers can quote vastly different premiums for the same property. While many consumers could save by switching, it is harder than it should be for consumers to shop around.”
“Our analysis has shown that, with the right actions, northern Australian insurance markets could work much better for consumers. We believe our wide-ranging recommendations would address many of the problems we have identified,” Ms Rickard said.
“Many of our recommendations, if adopted more broadly, could also benefit consumers and insurance markets across Australia.”
The ACCC has made 38 recommendations in this final report, including 11 new recommendations, that seek to improve outcomes in the short, medium and long term.
The inquiry considered a range of options that have been suggested to governments to improve affordability. The ACCC has recommended that, if governments want to provide immediate relief to consumers facing acute affordability pressures, subsidies be used in preference to other measures such as government reinsurance pools.
“Direct subsidies can be used in a highly targeted way to relieve some of the acute financial pressures faced by households in specific areas, at a lower cost and more effectively than other measures,” Ms Rickard said.
“We do not believe that government insurers and reinsurance pools can lower premiums without the government subsidising the insurer in some way. These measures also can’t be targeted to those consumers most in need, and so are more costly. Further, they involve transferring significant risks from insurers and reinsurers to governments, who are not well placed to manage them.”
Other recommendation that would provide immediate assistance include abolishing stamp duty on home, contents and strata insurance or, if it is maintained, that it be based on the sum insured of a property rather than the premium amount. The report notes that the rise in premiums on insurance in northern Australia has resulted in significant windfall gains for state and territory governments.
“We continue to advocate that a portion of any stamp duty revenue should be devoted to improving affordability of insurance for low income consumers or to funding mitigation works,” Ms Rickard said.
“However, the best outcome for consumers would be for stamp duty to no longer be applied to home, contents and strata insurance, which are often considered essential products that some households struggle to obtain.”
We also recommended that insurers provide more short-term help for customers struggling to pay their premiums when due, such as by deferring payments, reducing or waiving surcharges for monthly payments, or offering payment plans.
“The industry has no standard approach to assisting customers struggling to pay their premiums,” Ms Rickard said.
“It is crucial that we help households hold onto their insurance, because becoming uninsured can result in much greater financial hardship in the future if homes or possessions are impacted by a severe event.”
Better disclosure of surcharges imposed on monthly instalments has also been recommended, so that consumers can compare the difference in cost in dollar terms between paying annually or monthly. Some insurers apply a surcharge of up to 20 per cent, which can add hundreds of dollars a year to the cost of insurance.
The inquiry has also made a series of recommendations relating to risk mitigation, including new recommendations designed to make insurance more affordable in the future by reducing the risk of property loss or damage.
These include expanding the remit of the Australian Building Codes Board to explicitly include property protection as an objective when developing the National Construction Code, and that Standards Australia and the insurance industry develop voluntary standards for more resilient buildings, for both new homes and for retrofitting of existing homes.
“Importantly, we are calling on the insurance industry to commit to taking into account resilience measures when setting premiums,” Ms Rickard said.
The inquiry also looked at how risk data could be better shared and at improvements to land use planning.
The new recommendations add to the previous recommendations made by the inquiry over the past three years. These have included measures to make pricing more transparent, a ban on conflicted remuneration for insurance brokers and strata managers and that a national home insurance comparison website be considered.
During the past three years the ACCC considered more than 420 submissions and held public forums in Townsville, Cairns, Rockhampton, Mackay, Broome, Karratha, Darwin and Alice Springs.
“We have heard first-hand how many residents of northern Australia are struggling to find suitable and affordable insurance in this market, and the considerable impact this is having on them and their communities,” Ms Rickard said.
“We believe the work of this inquiry and the implementation of our recommendations will make a difference for people living in northern Western Australia, northern Queensland and the Northern Territory, and contribute to the long-term prosperity and liveability of this important part of Australia.”
Background
The ACCC commenced an inquiry into the supply of home, contents and strata insurance in northern Australia in July 2017, following a direction from the Australian Government.
The inquiry released update reports in June 2018 and July 2019 and interim reports in December 2018 and December 2019.
This final report concludes the inquiry.
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23 December 2020As the ACCC will have limited operations during the Christmas and New Year period, we wanted to provide you with details of arrangements over the break.
ACCC offices: Our offices will be closed from 5pm on Wednesday 23 December 2020 until 8:30am on Monday 4 January 2021.
Infocentre: The Infocentre phone lines will be closed from 24 December 2020 and will reopen on Monday 4 January 2021. Consumers and small businesses who would like to make a report to the Infocentre are encouraged to submit a web form.
Media enquiries: For urgent enquiries please call 0408 995 408 (no texts). The team will be back in the office from 4 January 2021.
Product safety: Mandatory reports on product safety injury reports and recall notifications can be made via the Product Safety website.
Merger enquiries: Any queries or information in relation to a merger or acquisition (whether or not the ACCC is presently reviewing it) should be emailed to [email protected]. 
Notifications and Authorisation applications: Applicants wishing to lodge a notification or application for authorisation should email [email protected] including a cover letter and details of the lodgement fee payment. Authorisation applications and notifications are not validly lodged until the relevant fee has been paid.
FOI requests: All applications lodged under the Freedom of Information Act (1982) will be assessed when the ACCC office reopens on 4 January 2021.
The ACCC wishes you a safe and enjoyable holiday period.
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Competition and Consumer Act 2010

23 December 2020The ACCC has made some important amendments to the Consumer Data Right Rules, following consent from the Treasurer.
The new rules expand the types of consumers who can use the Consumer Data Right (CDR) to include more business customers.  From 1 November 2021, the major banks will enable these customers to share their data with accredited data recipients when shopping around for better services.
“This significant package of amendments is designed to encourage participation in the Consumer Data Right by expanding its benefits to more businesses, including companies and partnerships,” ACCC Commissioner Sarah Court said.
The new rules also include provisions to improve the consumer experience and provide greater flexibility for participants’ business models.
“The new rules lay the foundation for the continued expansion of the Consumer Data Right in 2021, following the successful start of consumer data sharing in 2020,” Ms Court said.
“The rules will encourage increased participation in the Consumer Data Right, and new service offerings for consumers, while also ensuring that strong consumer protections continue to apply.”
The new version of the Consumer Data Right rules can be found on the Federal Register of Legislation website.
Background
The ACCC consulted on the draft Amendment Rules during September and October 2020. We received over 50 submissions from a broad range of stakeholders including banks, credit card providers, fintechs, industry bodies, and consumer and privacy advocates. 
We consulted with the Office of the Australian Information Commissioner, Treasury, the Data Standards Body, and with the primary regulators in the banking sector – ASIC and APRA. 
These new rules do not include rules about tiers of accreditation, the disclosure of ‘insights’ derived from CDR data to any non-accredited person, or the sharing of data with trusted advisors.  Further consideration will be given to those issues in light of the submissions provided by stakeholders during consultation.  
The rule-making function will transfer from the ACCC to the Minister on 28 February 2021. The ACCC is working closely with the Treasury on these rules as part of the transfer of the CDR rule-making function moving from the ACCC to Treasury and the Minister.
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21 December 2020The ACCC has instituted proceedings in the Federal Court against Lorna Jane Pty Ltd for alleged false or misleading claims about its ‘Anti-virus Activewear’, in breach of Australian Consumer Law.
In July 2020, Lorna Jane claimed that its ‘Anti-virus Activewear’, which was sprayed with a substance called ‘LJ Shield’, eliminated and stopped the spread of COVID-19 and provided protection against viruses and pathogens, including COVID-19, when this was not the case.
The claims, made over a wide range of media including on Instagram, on its website and in stores, included “Cure for the Spread of COVID-19? Lorna Jane Thinks So”, “With Lorna Jane Shield on our garments it meant that we were completely eliminating the possibility of spreading any deadly viruses”, and “LJ Shield – Protecting you with ANTI-VIRUS ACTIVEWEAR”.
Most of the claims were removed in mid-July, but until at least November 2020 Lorna Jane continued to represent on garment tags that the garment permanently protected the wearers against pathogens.
“It is particularly concerning that allegedly misleading claims that Lorna Jane’s LJ Shield Activewear could eliminate the spread of COVID-19 were made at a time when there was fear about a second wave emerging in Australia, especially in Victoria, and all Australians were concerned about being exposed to the virus,” ACCC Commissioner Sarah Court said.
The ACCC also alleges that Lorna Jane represented that there was a scientific or technological basis for these claims at the time they were made, when no such testing had been carried out.
“We allege that the statements made by Lorna Jane gave the impression that the COVID-19 claims were based on scientific or technological evidence when this was not the case,” Ms Court said.
“We are particularly concerned about this because consumers often trust well-known brands and assume that their marketing claims are backed up by solid evidence.”
“This year, the ACCC prioritised consumer and competition issues arising from the COVID-19 pandemic and we will continue to look closely at allegations relating to companies seeking to take advantage of the crisis by engaging in illegal conduct to enhance their commercial position or harm consumers,” Ms Court said.
It is also alleged that Lorna Jane director and chief creative officer, Ms Lorna Jane Clarkson, was knowingly concerned in the alleged conduct, including by personally making false or misleading claims about the LJ Shield ‘Anti-virus Activewear’ in a media release and a video posted on Lorna Jane’s Instagram account.
The ACCC is seeking declarations, penalties, injunctions, corrective notices and an order to implement a compliance program.
Background
Lorna Jane is an Australian-owned company that manufactures and retails women’s activewear, founded by its co-director Lorna Jane Clarkson. It has 108 stores in Australia, as well as a number of international stores, including in the USA and New Zealand.
On 17 July 2020, the Therapeutic Good Administration (TGA) issued three infringement notices to Lorna Jane, totalling $39,960.
The action taken by the TGA was separate to the ACCC’s proceedings. The TGA’s action related to Lorna Jane’s failure to register goods on the Australian register of therapeutic goods, a breach of the advertising code and Lorna Jane’s failure to seek TGA approval prior to making certain claims.
These example images were used in the Lorna Jane’s Instagram story posted on its page in July 2020.

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Competition and Consumer Act 2010

21 December 2020The ACCC has welcomed the Federal Government’s decision to improve the safety of button batteries by introducing new safety regulations.
The decision was announced by Assistant Treasurer, the Hon. Michael Sukkar, today.
Under the new mandatory safety and information standards, products must have secure battery compartments to prevent children from gaining access to the batteries.
Manufacturers must also undertake compliance testing to demonstrate batteries are secure, supply higher risk batteries in child-resistant packaging, and place additional warnings and emergency advice on packaging and instructions.
“The introduction of these standards is an important step in improving the safety of button batteries and helping prevent injury to children,” ACCC Deputy Chair Delia Rickard said.
Button batteries can be incredibly dangerous to young children, especially for children five years of age and under. If swallowed, a button battery can get stuck in a child’s throat and cause a chemical reaction that burns through tissue, causing death or serious injury. Insertion of a button battery into body orifices such as ears and noses can also lead to significant injuries.
In Australia, one child a month is seriously injured after swallowing or inserting a button battery, with some of them sustaining serious, lifelong injuries. In Australia and globally, there is a growing record of injuries and deaths from button batteries.
“Australia has become the first country in the world to have a button battery safety standard that applies across all consumer product categories,” Ms Rickard said.
“The standards will enable the ACCC to take strong action to ensure that businesses sell safe products. We encourage all businesses to transition to the new standards as quickly as possible.”
All businesses that supply button batteries or products containing button batteries in Australia must comply with the standards. Businesses will have 18 months to comply with the new standards.
The ACCC will make guidance material about the standards available to make it easy for all businesses to understand their obligations and for consumers to know what they can expect when buying button battery products.
More information about the button battery related mandatory standards is available from the Product Safety Australia Website. 
Background
The ACCC has worked with industry and state and territory Australian Consumer Law (ACL) regulators to improve the safety of button batteries and products that contain them for many years.
Regulators assessed products containing button batteries, and promoted information to assist suppliers to source safer products. The ACCC has engaged with suppliers for recalls of unsafe products that contain button batteries.
Regulators also undertook consumer education activities to raise awareness of the hazard of button batteries to consumers and business. The ACCC recently launched the ‘Tiny batteries – big danger’ safety campaign which included a short video describing the dangers of button batteries and explaining the importance of parents and carers keeping them away from children.
The issue of button battery safety is complex because mandatory safety and information standards for consumer goods with button batteries apply to a vast range of products, most of which are manufactured overseas and imported into Australia.
Button batteries are used in thousands of different products across many categories of consumer products. For some categories of consumer products, there are voluntary industry standards that include button battery safety requirements. The new mandatory standards have taken into account that some suppliers comply with voluntary industry standards that include acceptable button battery safety requirements. The regulatory burden of the new standards will be minimal for suppliers that currently adhere to these voluntary industry standards.
After broad consultation with national and international stakeholders in industry and medical professionals, the ACCC recommended that the Government adopt mandatory safety and information standards for button battery safety that apply to all consumer products sold in Australia.
Note to editors
Mandatory safety standards specify minimum requirements such as performance, design, construction, finish, and packing or labelling that products must meet before they can be supplied in Australia. Not all products have mandatory standards.
Mandatory information standards help ensure consumers are provided with important information about a product to assist them in making a purchasing decision. Information standards do not necessarily relate to the safety aspects of a product.
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22 December 2020The ACCC has announced that it will not accept a long-term behavioural undertaking offered by Google that sought to address competition concerns about its proposed acquisition of wearables supplier and manufacturer Fitbit.
The ACCC will therefore continue its investigation into Google’s proposed acquisition of Fitbit and has set a new decision date of 25 March 2021.
“The ACCC continues to have concerns that Google’s acquisition of Fitbit may result in Fitbit’s rivals, other than Apple, being squeezed out of the wearables market, as they are reliant on Google’s Android system and other Google services to make their devices work effectively,” ACCC Chair Rod Sims said. 
The proposed acquisition also further consolidates Google’s leading position in relation to the collection of user data, which supports its significant market power in online advertising and is likely to have applications in health markets.
“We are also continuing to investigate the acquisition’s potential impact on wearable operating systems. The acquisition may result in Google becoming the default provider of wearable operating systems for non-Apple devices and give it the ability to be a gatekeeper for wearables data, similar to the position it holds for smartphones which licence the Android operating system,” Mr Sims said.
“Wearable devices such as smart-watches are becoming more important in Australians’ online lives, and the user data these devices collect is likely to become increasingly valuable. The competition impacts of Google acquiring Fitbit to expand into these important markets needs to be very carefully considered.”
Google sought to address the ACCC’s competition concerns by offering a court enforceable undertaking that it would behave in certain ways towards rival wearable manufacturers, not use health data for advertising and, in some circumstances, allow competing businesses access to health and fitness data.
“While we are aware that the European Commission recently accepted a similar undertaking from Google, we are not satisfied that a long term behavioural undertaking of this type in such a complex and dynamic industry could be effectively monitored and enforced in Australia,” Mr Sims said.
“We recognise we are a smaller jurisdiction and that a relatively small percentage of Fitbit and Google’s business takes place here, however the ACCC must reach its own view in relation to the proposed acquisition given the importance of both companies to commerce in Australia.”
The proposed acquisition has received conditional clearance in Europe, but several other competition authorities, including the U.S. Department of Justice, are yet to make a decision.  Both companies are based in the U.S. and Fitbit’s market share is higher in the U.S. than in most other countries. The ACCC will continue to work closely with overseas agencies on these important competition issues. 
The ACCC has extended its decision date for reviewing the transaction through to 25 March 2021 in order to continue its investigation and consider its legal options. 
More information is available at Google LLC proposed acquisition of Fitbit Inc
Background
Fitbit is a manufacturer and supplier of wrist-worn wearable devices and other related products.
Google has an extensive range of interests including online search and advertising technology, mobile hardware and various commonly used software such as Google Chrome.
The ACCC published a Statement of issues outlining concerns with the proposed merger in June 2020 and commenced consultation on Google’s proposed undertaking in November 2020.
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22 December 2020Origin Energy has paid a penalty of $126,000 after the ACCC issued it with an infringement notice for an alleged false or misleading representation in a price increase letter sent to residential electricity customers in Victoria.
In the letter, Origin told customers on market offers that its electricity prices were changing, and represented that the reason for the change was the Victorian Essential Services Commission’s increase to the Victorian Default Offer.
The Victorian Default Offer is a price set by the Essential Services Commission for consumers on standing offers, and does not apply to consumers on market offers. Therefore, a change to the default offer does not affect the prices charged by Origin to households on market offers.
“The decision of whether or not to increase the electricity prices of customers on market offers was entirely in Origin’s hands, and they chose to increase prices for the majority of these customers,” ACCC Chair Rod Sims said.
“Electricity retailers must be clear when making price increase announcements so consumers aren’t given the misleading impression that government changes that don’t apply to them are the reason for the increase.”
“Electricity bills are a major household expense, and the ACCC will continue to take enforcement action against retailers that make misleading claims about the reason for price increases,” Mr Sims said.
Background
Most electricity customers in New South Wales, South Australia, South East Queensland and Victoria are on a market offer, which will often include special discounts or prices for a set period. Market offer plans vary between providers and can be changed at any time.
Standing offers are applied when a customer does not enter a market contract. In Victoria, standing offer contracts are tied to the government’s Victorian Default Offer. In New South Wales, South Australia and South East Queensland, consumers on standing offers have their electricity prices capped by the Default Market Offer.
Standing offer contracts are designed to give consumers access to a fair electricity deal, even if consumers are unable or unwilling to engage in the retail market.
In November 2019, the Essential Services Commission announced that the Victorian Default Offer would increase by 7.8 per cent on 1 January 2020 due to factors such as increased costs incurred by retailers in purchasing electricity in wholesale markets, and increased costs to access network to transport electricity to their customers.
In December 2019, Origin Energy sent the letter to residential consumers, including those on market offers in Victoria about Origin’s price increases.
Note to editors
The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Australian Consumer Law.
The ACCC can issue an infringement notice when it has reasonable grounds to believe a person or business has contravened certain consumer protection provisions in the Australian Consumer Law.
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Energy

21 December 2020The ACCC has accepted a court-enforceable undertaking from electricity retailer 1st Energy Pty Ltd in relation to representations made to consumers in Tasmania during unsolicited telemarketing calls.
Between 18 February and 23 August 2019, third party sales representatives for 1st Energy cold-called Tasmanian residential energy customers who had accounts with the state’s incumbent electricity provider Aurora Energy, and offered them a five per cent discount for paying on time.
1st Energy was a new entrant in the Tasmanian energy market at the time, seeking to sign up new customers.
1st Energy has admitted that the sales representatives made several representations that were likely to be false or misleading in breach of the Australian Consumer Law.
The sales representatives told certain customers that they represented independent energy comparators or experts or led them to believe they were calling on behalf of Aurora.
The 1st Energy sales representatives also represented to some consumers they would get a discount on their existing Aurora energy plan, when the offer actually applied to a 1st Energy plan.
Further, 1st Energy admits that some consumers were told they would have an opportunity to consider if they wanted to switch energy suppliers or enter into a contract after the call, when the sales representatives intended to initiate the switch immediately after the call.
“Consumers who receive unsolicited marketing calls have a right to expect that the caller will not mislead them about who they are and what they are offering. Nor should consumers be signed up to any contracts without their explicit consent,” ACCC Commissioner Sarah Court said.
“Consumers in Tasmania have been accustomed to only one choice of electricity retailer. We were concerned that some consumers were led to believe that they were talking to their existing provider or purported independent experts and were not made aware that they were being called by a retailer, 1st Energy.”
“Businesses should be aware that even when they rely on agents or other third parties to cold-call consumers for them, their obligations under the Australian Consumer Law also apply to conduct on their behalf by those agents,” Ms Court said.
1st Energy has undertaken to contact its affected customers by 1 February 2021 and help them exit their contracts, if they wish, without charge.
The company will also update its compliance program, staff training and complaints handling system to prevent similar conduct from occurring in the future.
A copy of the undertaking can be found at 1st Energy Pty Ltd.
Background
1st Energy is an electricity retailer which commenced operations in 2014, originally servicing New South Wales, Victoria, and Queensland. It commenced supplying electricity in Tasmania in February 2019.
The Tasmanian market previously had only one electricity retailer, Aurora Energy Pty Ltd.
More information and details on protections given to consumer as a result of entering agreements during unsolicited marketing calls, including cooling off periods, can be found at Telemarketing & door-to-door sales.
The Australian Government’s national Do Not Call Register allows consumers to list their home, personal mobile or fax number to reduce telemarketing calls.
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Competition and Consumer Act 2010

18 December 2020The ACCC does not object to an exclusive dealing notification lodged by Mitsubishi Motors Australia Limited (Mitsubishi) relating to its new 10-year or 200,000 km extended warranty. The warranty is conditional on the vehicle being serviced only by authorised Mitsubishi dealers and service centres.
Mitsubishi’s standard five-year warranty will still apply and does not limit consumers to any particular service provider. 
“The ACCC carefully considered a variety of factors in its decision, including a large number of submissions from independent mechanics, aftermarket parts suppliers, members of the public and associations,” ACCC Commissioner Stephen Ridgeway said.
“While a number of consumers will no doubt value a longer warranty, we recognise the concerns that the requirement to use Mitsubishi dealers and service centres may have an impact on independent mechanics’ ability to provide competition.”
“The ACCC has allowed this notification to stand based on current information. There is no basis at present to conclude that the notified conduct has the purpose, effect or likely effect of substantially lessening competition,” Mr Ridgeway said.
However, the ACCC is able to revoke the notification at a later date if the relevant circumstances and available information change.
“We recognise the importance of competition provided by independent mechanics. If, as this warranty arrangement is implemented, the evidence shows that it is materially harming competition, and we consider at that point that the public benefit does not outweigh the public detriment, we are able to move to revoke the notification,” Mr Ridgeway said.
Further information, including the exclusive dealing notification, the ACCC’s statement of reasons, and public submissions from interested parties, is available on the ACCC’s public register at Mitsubishi Motors Australia Limited.
Background
Mitsubishi is an importer and distributor of Mitsubishi-manufactured vehicles. Mitsubishi distributes Mitsubishi vehicles to a network of franchisee dealers that then sell the vehicles to consumers and offer servicing and repair services. Mitsubishi also licenses standalone service centres to repair and service Mitsubishi vehicles, but not to sell vehicles to consumers.
Exclusive dealing notifications
Exclusive dealing occurs when one person trading with another restricts the other’s freedom to choose with whom, in what or where it deals. Exclusive dealing can take a number of forms, including the supply of goods or services, or the supply at a particular price or discount, on condition that the buyer will not acquire, or will limit the acquisition of, goods or services from a competitor of the supplier.
Exclusive dealing can breach the Competition and Consumer Act (2010), but only if the restriction is likely to have the purpose, effect or likely effect of substantially lessening competition.
Once an exclusive dealing notification is lodged with the ACCC, protection for the notified conduct begins automatically. 
The decision to allow a notification to stand does not mean that it can never be revoked; the ACCC can revoke an exclusive dealing notification at any time, but only where it is satisfied that the notified conduct:

has the purpose, effect or likely effect of substantially lessening competition, and
in all the circumstances, will not result in likely public benefit which would outweigh the likely public detriment.

New car retailing market study
On 14 December 2017, the ACCC released its final report for the new car retailing industry market study. The market study presents the ACCC’s findings from almost 18 months of investigation, consultation and research, and is based on a wide range of evidence.
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Authorisations

18 December 2020The ACCC is proposing to authorise the Queensland Dairyfarmers’ Organisation Limited’s (QDO) Fair Go Dairy licensing scheme for five years.
Under the scheme, QDO will grant processors a licence to use the ‘Fair Go Dairy’ logo on qualifying dairy products.
Qualifying dairy products must contain at least 80 per cent unprocessed milk that was produced by Queensland dairy cows and purchased from a Queensland dairy farmer for a price not less than a “sustainable and fair” price calculated by QDO.
The ACCC’s preliminary view is that on balance the Fair Go Dairy Scheme is likely to result in some limited public benefits through small improvements in information and choice for consumers, and a small increase in retail competition in Queensland.
“The ACCC recognises that there are some consumers who want to know more about the dairy products they buy and how much dairy farmers were paid to produce them. If the scheme is authorised, it could be useful for those consumers, if they understand what the Fair Go Dairy logo conveys” ACCC Deputy Chair Mick Keogh said.
So far, none of the major milk processors in Queensland have indicated they will participate in the scheme, although several smaller processors have expressed interest.
The ACCC has also considered whether any public detriments will arise from authorising the scheme.
“We have considered whether the logo is likely to mislead consumers, reduce competition, increase retail prices for dairy products or reduce the incentive for farms to innovate,” Mr Keogh said.
“We believe these outcomes are unlikely, although we are seeking further submissions from the public on possible harm that might arise from the scheme or the Fair Go Dairy Logo.”
The ACCC has also granted interim authorisation to QDO to allow them to immediately commence negotiations with milk processors and undertake marketing and planning for their proposed ‘Fair Go Dairy’ licensing scheme. However, any resulting agreements cannot be signed or come into effect until the ACCC’s final determination.
The ACCC is seeking feedback on the impacts of the interim authorisation and the draft determination proposing to authorise the scheme for five years. More information, including the draft determination, interim authorisation decision, and details on how to make a submission are available at Queensland Dairyfarmers’ Organisation Limited.
Background
QDO is an advocacy organisation representing the interests of dairy farmers across Queensland. QDO is a not-for-profit organisation with voluntary dairy farmer membership.
Processors that comply with the ‘Fair Go Dairy’ scheme will be able to affix the following registered trade mark to resulting dairy products (milk, dairy cream, dairy desserts and cheese variants):

The ‘Fair Go Dairy’ scheme is intended to be voluntary, where only brands who would like to display the trade mark, denoting that they are paying farmers a ‘sustainable and fair farmgate price’, must comply with the scheme.
The ‘sustainable and fair farmgate price’ is calculated annually by multiplying the average cost of production for milk as published by Queensland Dairy Accounting Scheme’s annual report by a CPI adjustment rate.
QDO has sought interim authorisation from the ACCC because the scheme may otherwise involve behaviours that could breach the Competition and Consumer Act 2001, since participants in the scheme are likely to be competitors.
Notes to editors
ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.
Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.
The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.
Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
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Agriculture
Authorisations

17 December 2020The ACCC will not oppose BGC’s proposed acquisition of Midland Brick.
BGC and Midland Brick both manufacture and supply clay bricks in Western Australia, along with other clay and masonry building products. BGC is also a residential and commercial builder.
“We examined the proposed acquisition carefully, because it would combine two of the three major suppliers of clay bricks in the West Australian market,” ACCC Commissioner Stephen Ridgeway said.
“A key factor in the ACCC’s decision was the likelihood that Midland Brick and its production capacity would exit the market entirely if the proposed acquisition did not proceed.”
The ACCC investigated the likelihood that Midland Brick would continue to operate or be sold to an alternative purchaser if the proposed acquisition did not proceed, and reviewed internal business records and conducted compulsory examinations of key industry participants.
“There was sufficient evidence that showed that without the proposed acquisition the owners of Midland Brick would move to demolish the brick kilns, and the exit of Midland Brick from the market would likely be brought forward,” Mr Ridgeway said.
“We concluded that the exit of Midland Brick would be a worse outcome for competition compared to the proposed acquisition proceeding.”
Some market participants warned that the exit of Midland Brick’s production capacity could contribute to a significant shortage of bricks if demand were to suddenly increase quickly.
“Feedback from industry participants indicated that it was important that the production capacity of Midland Brick remained in the market over the medium term to meet future demand,” Mr Ridgeway said.
“We determined that regardless of whether BGC acquires Midland Brick, there will likely be only two brick manufacturers supplying Western Australia, and so the proposed acquisition is unlikely to substantially lessen competition.”
In relation to the supply of masonry products, the ACCC concluded that the proposed acquisition was unlikely to result in a substantial lessening of competition in relation to those products.
Further information is available at BGC – Midland Brick.
Background
BGC is a vertically integrated manufacturer of building products, and residential and commercial builder in Western Australia. BGC supplies a range of clay and masonry products, including clay bricks through its Brikmakers brand.
Midland Brick is a manufacturer of building products, including clay bricks, and is based in Western Australia. Midland Brick also produces clay pavers, masonry pavers, and masonry blocks.
In August 2019, Boral agreed to sell Midland Brick to property developers, Linc Property Pty Ltd and Fini Group Pty Ltd (now trading as Hesperia Property Pty Ltd and Birchmead Pty Ltd, together the consortium). The transaction completed in September 2020.
BGC proposes to acquire the Midland Brick business, including a lease on which two of Midland Brick’s three operating brick kilns are situated, as well as brick inventory. The consortium intends to retain and develop the remaining land. The proposed acquisition also includes Midland Brick’s masonry business, and a parcel of land upon which the masonry business is situated.
Release number: 274/20ACCC Infocentre: Use this form to make a general enquiry.
Media enquiries: Media team – 1300 138 917
Audience

Industry

Topics

Mergers

17 December 2020Australia’s commercial airlines are operating at a fraction of their pre-COVID-19 capacity but there is growing optimism within the industry as demand for interstate travel increases.
The ACCC’s second Airline Competition in Australia report, released today, shows total passenger numbers for the month of September 2020 were 87 per cent lower than September last year, and airline industry revenues were commensurately lower.
However, with signs that all states now have COVID-19 under some control, and with key domestic borders opening up, airlines are increasing capacity to meet pent-up travel demand.
“COVID-19 has created some of the most difficult market conditions in Australian aviation history but we are beginning to see cautious optimism among airlines about increasing passenger numbers in the months ahead,” ACCC Chair Rod Sims said.
“The bulk of the flying in Australia this year has been within states, mainly in Queensland and Western Australia. But with borders now re-opened, interstate travel will start to look more like it did pre-COVID, particularly with the return of the all-important Sydney-Melbourne-Brisbane golden triangle routes.”
“Although the international border will remain closed for the foreseeable future, the demand for domestic holiday and family-reunification travel is expected to drive recovery,” Mr Sims said.
“We are mindful that the industry’s optimism is necessarily cautious and the path to recovery is fragile, as we saw with new COVID-19 cases in South Australia during November.”
Qantas and Rex gained market share in September at the expense of Virgin, but the report notes the three main carriers’ share of passengers may be volatile given the depressed state of the industry.
“We expect airlines’ market shares will move around a bit in the short term as the industry continues operating at reduced capacity. At this stage, it is difficult to know exactly how competition will evolve as the industry emerges from this period,” Mr Sims said.
The report outlines a number of significant developments in the airline industry in recent months, including the finalisation of the sale of Virgin to Bain Capital. Virgin has announced plans to position itself as a mid-market carrier with a business product, although several aspects of its service offering are currently under review.
“As Australia’s second largest airline, Bain’s direction for Virgin will likely have major implications for competition in the domestic airline industry,” Mr Sims said.
Regional operator Rex has further progressed its plans to expand into major domestic routes, and its services between Sydney and Melbourne are due to commence from 1 March 2021. 
One of the key inputs Rex will need to compete on capital city routes is access to take-off and landing slots. Rex has secured slots for its launch in March 2021, and is working on slots for the next season from April 2021. The Australian Government has initiated a review of demand management at Sydney (Kingsford Smith) Airport and the report includes an overview of the ACCC’s submission to this review.
“A fundamental objective of any reform to the existing slot management scheme at Sydney Airport should be to ensure that the allocation results in the most efficient use of slots, and fosters an environment of robust competition between airlines,” Mr Sims said.
“With airlines beginning to increase their operations, we will continue to monitor the industry and watch out for signs that competition is being stifled in any way, such as through the inability to access slots at Sydney Airport.”
Australian domestic air services – September 2019 to September 2020

Source:  Bureau of Infrastructure, Transport and Regional Economics; Australian domestic airline activity.
Note:  Data is for regular public transport (i.e. commercial flight operations on fixed schedules and specific routes available to the general public) and does not include charter operations.
Busiest routes by monthly capacity – September 2019 and September 2020                                                                         

Source:  Data collected by ACCC from Qantas, Virgin Australia and Rex.
Background
On 19 June 2020, the ACCC was directed by the Treasurer, The Hon Josh Frydenberg MP to monitor the prices, costs and profits of Australia’s domestic airline industry and provide quarterly reports to inform Government policy. This report is the second under the Treasurer’s direction.
The direction under Part VIIA of the Competition and Consumer Act enables the ACCC to require information from relevant companies. The direction is for three years.
Release number: 273/20ACCC Infocentre: Use this form to make a general enquiry.
Media enquiries: Media team – 1300 138 917
Audience

Media

Topics

COVID-19
Competition and Consumer Act 2010

15 December 2020The ACCC has today published a Dairy Code: initial observations on compliance update that outlines the ACCC’s views on dairy processors’ compliance with the Dairy Code of Conduct, one year after it came into effect, and six months since dairy processors were required to publish their standard form milk supply agreements.
Areas of concern identified in the update include processors’ compliance with the publishing obligations, as well as the code’s single document, termination and supply period requirements.
“The ACCC has been engaging with the dairy industry over the past year to help farmers and processors better understand their obligations and rights under this new mandatory code,” ACCC Deputy Chair Mick Keogh said.
“In the short time that the code has been in effect we’ve seen it bring some positive changes to the industry, but we’ve also identified areas where processors need to improve their compliance.”
“We invite processors to review their milk supply agreements in light of this update and seek legal advice if needed. We also encourage farmers and other dairy industry participants to re-familiarise themselves with their code rights and obligations,” Mr Keogh said.
One of the code’s core obligations is that processors publish milk supply agreements by 2pm on 1 June each year. To date, the ACCC has announced two enforcement outcomes relating to failures to publish by the deadline, and investigations into others continue.
“Dairy processors must ensure they meet their publishing obligations under the code and our enforcement action to date shows that we take non-compliance with these obligations seriously. Processors and farmers must also be certain that the agreements themselves, including the terms, comply with the code’s various requirements,” Mr Keogh said.
From 1 January 2021, all milk supply agreements, regardless of when they were entered into, must be compliant with the code.
Background
The Dairy Industry Code of Conduct is an industry code regulating the conduct of farmers and milk processors in their dealings with one another. It came into effect on 1 January 2020. A mandatory dairy code of conduct was a key recommendation of the ACCC’s 2018 dairy inquiry.
The Federal Government will lead a review of the code in 2021 that assesses its role, impact and operation. The review will include consultation with a range of dairy industry stakeholders, including farmers, and the ACCC as the agency that enforces the code.
The ACCC recently conducted an inquiry into bargaining power in supply chains for perishable agricultural products in Australia. Among other things, the inquiry examined issues in the dairy industry.
The report is available at Perishable Agricultural Goods Inquiry Report.
Release number: 270/20ACCC Infocentre: Use this form to make a general enquiry.
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Audience

Media

Topics

Agriculture

16 December 2020Jason Ellis, a former general manager of sales and marketing at BlueScope Steel Limited (BlueScope), was sentenced to eight months imprisonment, for inciting the obstruction of an ACCC investigation into alleged price fixing by BlueScope.
Late yesterday, Magistrate Atkinson ordered that Mr Ellis be released, without entering custody, upon entering into a recognizance in the sum of $1,000, on the condition that he be of good behaviour for two years. Magistrate Atkinson also ordered that Mr Ellis pay a fine of $10,000. 
In imposing sentence, Magistrate Atkinson emphasised the seriousness of Mr Ellis’s conduct, and said: “in all dealings [with the ACCC] a person needs to allow investigations to run properly, without any attempt to hinder investigations by officials”.
“This is the first time an individual had been charged with, and convicted of, inciting the obstruction of an ACCC investigation,” ACCC Chair Rod Sims said.
Mr Ellis incited two fellow BlueScope employees to give false information and evidence to the ACCC regarding discussions he and those BlueScope employees had during their meetings with certain other steel companies.
The ACCC was investigating allegations that, between September 2013 and June 2014, BlueScope and Mr Ellis attempted to induce various steel distributors in Australia and overseas manufacturers to enter arrangements containing a price fixing provision. 
The ACCC has since filed separate civil cartel proceedings against BlueScope and Mr Ellis, which remain before the Federal Court.
“Mr Ellis’ attempts to stop us from doing our job, from investigating and prosecuting behaviour we believe breaches competition laws, did not deter us. Not only did we continue our investigation and take legal action against Blue Scope and Mr Ellis for alleged cartel behaviour despite his efforts to obstruct us, we also referred the obstruction conduct to the CDPP to consider prosecuting Mr Ellis,” Mr Sims said.
“We take any attempts to prevent the ACCC from obtaining full and truthful accounts of conduct under investigation extremely seriously and won’t hesitate to prosecute any similar cases in the future.”
“The conviction and sentence reflect the seriousness of this conduct and should send a strong message to anyone contemplating obstructing or inciting someone else to obstruct ACCC officers in the course of our investigations,” Mr Sims said.
Inciting the obstruction of a Commonwealth official in the performance of their functions is a criminal offence under the Commonwealth Criminal Code, and carries a maximum jail sentence of two years.  On a guilty plea in the Local Court, the maximum jail sentence is one year.
Background
The ACCC investigates cartel conduct, manages the immunity process, takes proceedings in the Federal Court in respect of civil cartel contraventions, and refers serious cartel conduct and, where appropriate, other conduct which may amount to obstruction of justice offences to the CDPP for consideration for prosecution.
The CDPP is responsible for prosecuting criminal offences in accordance with the Prosecution Policy of the Commonwealth. 
Anyone with information about any cartel conduct is urged to call the ACCC Cartel Hotline on (02) 9230 3894 or email [email protected].
Release number: 271/20ACCC Infocentre: Use this form to make a general enquiry.
Media enquiries: Media team – 1300 138 917
Audience

Media

Topics

Cartels

16 December 2020The ACCC has instituted proceedings in the Federal Court against Facebook, Inc. and two of its subsidiaries for false, misleading or deceptive conduct when promoting Facebook’s Onavo Protect mobile app to Australian consumers.
Onavo Protect was a free downloadable software application providing a virtual private network (VPN) service. 
The ACCC alleges that, between 1 February 2016 to October 2017, Facebook and its subsidiaries Facebook Israel Ltd and Onavo, Inc. misled Australian consumers by representing that the Onavo Protect app would keep users’ personal activity data private, protected and secret, and that the data would not be used for any purpose other than providing Onavo Protect’s products.
In fact, the ACCC alleges, Onavo Protect collected, aggregated and used significant amounts of users’ personal activity data for Facebook’s commercial benefit. This included details about Onavo Protect users’ internet and app activity, such as records of every app they accessed and the number of seconds each day they spent using those apps.
This data was used to support Facebook’s market research activities, including identifying potential future acquisition targets.
“Through Onavo Protect, Facebook was collecting and using the very detailed and valuable personal activity data of thousands of Australian consumers for its own commercial purposes, which we believe is completely contrary to the promise of protection, secrecy and privacy that was central to Facebook’s promotion of this app,” ACCC Chair Rod Sims said.
“Consumers often use VPN services because they care about their online privacy, and that is what this Facebook product claimed to offer. In fact, Onavo Protect channelled significant volumes of their personal activity data straight back to Facebook.”
“We believe that the conduct deprived Australian consumers of the opportunity to make an informed choice about the collection and use of their personal activity data by Facebook and Onavo,” Mr Sims said.
The Onavo Protect website stated that the app would “save, measure and protect” users’ mobile data, while advertisements on Facebook’s website and app included statements such as “Keep it secret. Keep it safe… Onavo Protect, from Facebook”.
The ACCC is seeking declarations and pecuniary penalties.

Background
US-based Facebook, Inc. owns global social media and private messaging platforms including Facebook, Instagram and WhatsApp.
US-based Onavo, Inc. and Onavo Mobile Ltd, based in Israel, were mobile analytics companies that were acquired by Facebook in October 2013. After the acquisition Onavo Mobile became Facebook Israel Ltd.
Apple removed Onavo Protect from its App store in 2018 for non-compliance with its developer terms such as, among other things, collecting information about other apps installed on a user’s device for the purposes of analytics. It was later also removed from the Google Play store and was discontinued in 2019.
The ACCC’s Digital platforms inquiry final report examined a range of issues involving digital platforms and consumers, including concerns about Onavo Protect and how its users’ data was being collected and used.
In December 2020, in an unrelated action, the US Federal Trade Commission (US FTC) brought proceedings against Facebook, alleging that the company is illegally maintaining its personal social networking monopoly through a years-long course of anticompetitive conduct. The US FTC alleges that Facebook engaged in a systematic strategy including its 2012 acquisition of Instagram and 2014 acquisition of WhatsApp, and the imposition of anticompetitive conditions on software developers to eliminate threats to its monopoly. The court documents filed by the US FTC refer to Facebook’s use of Onavo Protect data to identify future acquisitions as part of the allegation that Facebook is illegally maintaining a monopoly.
Release number: 272/20ACCC Infocentre: Use this form to make a general enquiry.
Media enquiries: Media team – 1300 138 917
Audience

Media

Topics

Competition and Consumer Act 2010

15 December 2020The ACCC has outlined preliminary competition concerns with Woolworths’ (ASX: WOW) proposal to acquire 65 per cent of PFD Food Services.
PFD is a wholesale food distributor, purchasing a wide range of food products from manufacturers and distributing them to food service businesses such as restaurants and cafés, fast food franchises, hotels and clubs.
“The ACCC is concerned that the proposed acquisition seems likely to increase Woolworths’ already substantial bargaining power in its dealings with food manufacturers,” ACCC Chair Rod Sims said.
Woolworths and PFD both acquire food and groceries from suppliers such as frozen food manufacturers, dairy processors and manufacturers of pasta and sauces.
“The ACCC is concerned that the proposed acquisition would remove PFD as an important alternative customer in the food sector, reducing the number of buyers and increasing Woolworths’ relative size as a customer of food manufacturers and suppliers,” Mr Sims said.
“The dominance of Coles and Woolworths in food retail means that wholesale food distribution is an important alternative customer channel for manufacturers.”
The ACCC is also considering whether the proposed acquisition could affect downstream competition.
“If Woolworths was able to use its existing bargaining power as a retail buyer to gain better supply prices for PFD than PFD could obtain on its own, in the medium term this could have serious consequences for the structure of the wholesale food distribution sector, such as reduced range, choice, and service levels,” Mr Sims said.
The ACCC is also continuing to consider other issues, including whether Woolworths acquiring a company which supplies its competitors will lead to risks of foreclosure, and the extent to which Woolworths at Work and AGW compete with PFD at the moment or are likely to compete with PFD in future. 
Feedback on the ACCC’s statement of issues is due by Monday, 1 February 2021.
The ACCC’s final decision will be announced on 22 April 2021. Further information is available at Woolworths – PFD Food Services.
Background
Woolworths is a large food retailer listed on the ASX. Woolworths also operates the online business Woolworths at Work, which supplies to commercial customers and Woolworths AGW which provides wholesale food distribution to a petrol and convenience chain.
PFD is a privately owned wholesale food distributor supplying food products and distribution services. PFD operates a national network of warehouses and a fleet of delivery vehicles. PFD distributes to food service businesses such as restaurants and cafés, franchised quick service restaurants, hotels and clubs and other businesses.
Release number: 268/20ACCC Infocentre: Use this form to make a general enquiry.
Media enquiries: Media team – 1300 138 917
Topics

Mergers

15 December 2020The ACCC has commenced proceedings in the Federal Court against Retail Food Group Limited (ASX: RFG) and five of its related entities (Retail Food Group), alleging the food and beverage franchise company engaged in unconscionable conduct and made false or misleading representations in its dealings with franchisees, in breach of the Australian Consumer Law.
Retail Food Group manages and operates a number of franchises, including Michel’s Patisserie, Brumby’s Bakery, Donut King and Gloria Jean’s Coffee.
The ACCC alleges that Retail Food Group acted unconscionably and engaged in false, misleading and deceptive conduct when it sold or licensed 42 loss-making corporate stores to incoming franchisees between 2015 and 2019.
It is alleged that Retail Food Group withheld important financial information from the incoming franchisees who were purchasing or licensing the loss-making corporate stores, and made false or misleading representations to them about the viability or profitability of the stores.
“We allege that Retail Food Group withheld critical profit and loss information about these corporate stores from incoming franchisees, and falsely represented that these loss making stores were viable or profitable,” ACCC Chair Rod Sims said.
In documents issued to incoming franchisees, Retail Food Group claimed it could not estimate earnings for a particular franchise. In fact, the ACCC alleges Retail Food Group knew the earnings of each loss making store, and was well aware that the stores being sold or licensed had been loss-making in the current or the previous financial year. 
“The prospective franchisees simply had no way of knowing the true financial performance of the stores, and we allege that Retail Food Group took advantage of this when selling or licensing the stores,” Mr Sims said.
The ACCC’s case also involves allegations in relation to the franchise marketing funds. 
All franchisees were required to pay marketing fees to Retail Food Group, to be held and administered by the franchisor, to pay for marketing and advertising activities. 
The ACCC alleges that Retail Food Group used these marketing funds, to which franchisees had contributed, to pay for non-marketing expenses in breach of the Franchising Code. In some cases, this allegedly included personnel costs for executives and employees who were not in marketing roles.
In the case of the Michel’s Patisserie marketing fund, it is also alleged that Retail Food Group paid around $22 million from the marketing fund to cover a range of operational and other non-marketing expenses, which included the cost of implementing a business model changing from fresh cakes to frozen in franchise stores, and part of the losses from some corporate stores.
“The Franchising Code makes it clear that marketing funds can only be used to cover legitimate marketing and advertising expenses, administration costs, expenses disclosed to franchisees or those agreed to by a majority of franchisees.” 
“We allege that Retail Food Group acted in breach of the Code, and in some cases unconscionably, by making improper undisclosed payments from the marketing funds for its own benefit, to the detriment of franchisees,” Mr Sims said.
The ACCC is seeking declarations, injunctions, pecuniary penalties, disclosure and adverse publicity orders, a compliance program order, redress orders, and costs.
Background
Retail Food Group Limited is a publicly listed company, and the ultimate holding company for a group of companies that operate one of the largest multi-brand franchise operations in Australia.
The ACCC has commenced legal action against Retail Food Group Limited, Michel’s Patisserie System Pty Ltd, Brumby’s Bakeries System Pty Ltd, Donut King System Pty Ltd, Jireh International Pty Ltd (Gloria Jean’s Coffees), and RFGA Management Pty Ltd.
RFGA Management Pty Ltd is the principal operating entity appointed to manage the franchise systems for, and on behalf of, the other five respondents.
Retail Food Group owns and operates a number of other national franchise brands, including Crust Pizza, Pizza Capers and The Coffee Guy. The legal action commenced by the ACCC does not make any allegations in respect of these brands.
Guidance on the rights of franchisees can be found on the ACCC’s website: Franchising code of conduct.
Release number: 269/20ACCC Infocentre: Use this form to make a general enquiry.
Media enquiries: Media team – 1300 138 917
Audience

Media

Topics

Franchising

14 December 2020The ACCC will not oppose IOOF’s (ASX:IFL) proposed acquisition of MLC Wealth Management, owned by National Australia Bank (ASX:NAB).
IOOF and MLC both supply wealth management solutions in Australia. They compete in the supply of retail platforms for superannuation and other retirement income, retail platforms for discretionary investments, corporate platforms for superannuation and other retirement income, financial advice to consumers, and investment/asset management.
“Transactions that combine two major firms in a sector will attract close scrutiny from the ACCC,” ACCC Commissioner Stephen Ridgeway said.
“However, feedback from customers, financial advisers and other industry participants suggested that this deal would not be likely to substantially lessen competition.”
The ACCC’s review indicated that, post-acquisition, IOOF would be competing with and constrained by several other large firms along with a number of smaller firms for the supply of retail platforms.
For the supply of corporate platforms for superannuation and other retirement income, the review indicated that IOOF would still face significant competition from large industry superfunds.
For the supply of financial advice, information provided to the ACCC indicated that IOOF would still only have a market share of approximately 10 per cent post-acquisition, that the market would remain highly fragmented and the merged entity would face competition from AMP, a similar-sized competitor, as well as other smaller firms.
“Despite the profile and size of this transaction, it does not raise concerns under section 50 of the Competition and Consumer Act largely due to the fragmented nature of most of the relevant markets and strong constraints from remaining competitors,” Mr Ridgeway said.
Further information is available at:  IOOF Holdings Limited – MLC Wealth Management (Owned by NAB)
Background
IOOF is an ASX-listed financial services company operating in Australia. IOOF provides financial advice through employed advisers at Shadforth Financial Group and Bridges, and advice licensees at Consultum Financial Advisers, Financial Services Partners, Lonsdale Financial Group, Millennium 3 and RI Advice.
MLC is the wealth management business owned by NAB. MLC provides financial advice through employed advisers at MLC Advice, and advice licensees at TenFifty and Godfrey Pembroke.
Both IOOF and MLC offer a range of products and services in the following segments:

Platforms, retirement and investment solutions, including superannuation and non-superannuation investment administration platforms for financial advisers, individuals, employers and corporations. 
Financial advice, through networks of employed and licensed advisers.
Investment/asset management, including direct asset management or multi-asset/multi-manager diversified investment products. 

Release number: 267/20ACCC Infocentre: Use this form to make a general enquiry.
Media enquiries: Media team – 1300 138 917

11 December 2020ACCC Chair Rod Sims has welcomed Treasurer Josh Frydenberg’s announcement today that Anna Brakey and Peter Crone will join the agency as Commissioners.
Ms Brakey and Mr Crone have both been appointed for five year terms.
Ms Brakey brings to the ACCC extensive experience in infrastructure regulation. She joins the ACCC from Frontier Economics, after spending over 20 years at the NSW Independent Pricing and Regulatory Tribunal, including as Chief Operating Officer and then as a Tribunal Member.
She has worked at various other public agencies including the Productivity Commission and the NSW Department of Transport.
Ms Brakey holds a Bachelor of Economics from the Australian National University (ANU) and Graduate Diploma of Applied Finance and Investment from the Securities Institute of Australia. She is also a graduate of the Australian Institute of Company Directors. She is based in Sydney.
Mr Crone has over 30 years’ experience in economic policy and commercial strategy and has held varied and senior positions in the private and public sectors. He has served as an economic advisor to state and federal governments, including as Senior Economic Advisor to Australia’s Prime Minister from 1997 to 2006, and as chief economist at the Business Council of Australia, EY and Coles Group.
Peter has been a commercial adviser to a number of superannuation funds on infrastructure investments, and a member of the ASX Corporate Governance Council.  He also spent seven years at Commonwealth Treasury as a policy adviser and research economist.
He holds a Masters of Economics from ANU and a Bachelor of Economics from the University of Western Australia. He is also a Graduate of the Australian Institute of Company Directors, and is based in Melbourne.
“We are very pleased to welcome Anna and Peter, who both have impressive economic and commercial credentials and who have made significant contributions in their fields,” Mr Sims said. “Their appointments will further deepen and broaden the expertise and experience of our team.”
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Media enquiries: Media team – 1300 138 917
Audience

Media

Topics

Competition and Consumer Act 2010

10 December 2020Australia’s perishable agricultural goods markets need a new fair trading law to address harmful practices arising from bargaining power imbalances that are not covered by current laws, the ACCC has found.
The ACCC’s Perishable Agricultural Goods Inquiry Report, released today, recommends the introduction of an unfair trading practices prohibition, and the strengthening of the small business unfair contract term protections and the Food and Grocery Code of Conduct.
The inquiry examined markets for perishable agricultural goods, including meat products, eggs, seafood, dairy products and horticultural goods. The ACCC analysed the factors that affect the bargaining power of farmers, processors and retailers of perishable agricultural goods, and where this can lead to economic harm.
“The inquiry found that a number of features of perishable agricultural goods supply chains have the potential to cause harm to suppliers and the efficiency of markets more generally,” ACCC Deputy Chair Mick Keogh said.
“In most perishable agricultural goods markets, there are many farmers, but few processors or wholesalers, and even fewer major retailers.”
“This makes farmers particularly vulnerable to issues stemming from limited competition at the wholesale or retail level. In addition, the more perishable a product is, the weaker the farmer’s bargaining power often is,” Mr Keogh said.
The ACCC heard a range of allegations about conduct by parties with strong bargaining power relative to their suppliers. Allegations listed in the report include unilateral variations of supply terms which greatly affect farmers’ income, and commercial retribution for suppliers who seek a price increase or raise concerns about the conduct of the other party.
While submissions to the ACCC included allegations of harmful conduct across all perishable agricultural industries, the most serious allegations arose in the chicken meat and horticultural industries.
“We will investigate potential unfair contract terms in the chicken meat industry following this inquiry, as well as reports that some horticultural wholesalers are trading in breach of the Horticulture Code,” Mr Keogh said.
The report says a lack of price transparency in markets for perishable goods can also weaken bargaining power. This is particularly the case for farmers, who are typically not in a position to influence the prices they receive for their goods.
“The effects of imbalances in bargaining power can weaken confidence in markets, reduce incentives to invest, and result in slower productivity growth,” Mr Keogh said.
The report says that certain reforms already being considered would address some of the issues identified through the inquiry. These include proposals to strengthen Australia’s small business unfair contract terms law, and the ACCC’s new small business collective bargaining class exemption, due to come into effect in early 2021.
However, the ACCC considers that these upcoming changes will not be enough to address all the significantly harmful practices identified in the inquiry.
The ACCC has therefore recommended the introduction of an economy-wide unfair trading practices prohibition to address conduct that causes significant harm to businesses.
“Australian governments and agencies are already discussing a potential prohibition on unfair trading practices, and the findings of our report are further evidence that it’s needed,” Mr Keogh said.
Bargaining power imbalances are also present at the wholesale level of the supply chains of perishable agricultural goods, and processors and wholesalers exist in a highly contested, tough bargaining environment, the report says.
The ACCC has recommended that the Food and Grocery Code, which governs certain conduct by grocery retailers and wholesalers in their dealings with suppliers, be made mandatory and include penalties for contraventions.
The ACCC also recommended that governments and industries should explore measures to increase price transparency in perishable agricultural goods industries, in order to increase competition.
The inquiry found that the introduction of the mandatory Dairy Code has increased transparency of prices and contracting arrangements, and reduced barriers to farmers switching between processors, which encourages competition. While there may be room for improvement in some aspects of the Dairy Code, the ACCC considers that it is too early to be recommending substantial changes to the Code.
The full report is available at Perishable Agricultural Goods Inquiry Report.
Background
On 28 August 2020, the Treasurer issued a direction to the ACCC to hold an inquiry into markets for the supply of perishable agricultural goods.
The three-month inquiry looked at meat products (chicken, pork, beef and lamb), eggs, seafood, dairy products and horticultural goods.
The analysis in the report is based on information gathered specifically for this inquiry, and also draws on information obtained through past ACCC inquiries, market studies and investigations.
The ACCC received over 80 submissions to the inquiry, more than half of which were subject to confidentiality claims. Submissions were received from participants and representatives across many perishable goods markets and from different levels of the supply chain. 
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Audience

Media

Topics

Agriculture