Market dynamics and supply chains

Given the need for the food sector to be internationally competitive, the disparity in market power that often exists between participants, and the inextricable links between businesses along the supply chain, governments must:

a) ensure that competition regulation and enforcement keep pace with developments in the sector
b) in partnership with industry, accelerate the development of consumer driven, efficient supply chains through education, training and research.

Recomendation 2(a)
Agree.

The Australian Government is developing a number of amendments to the Trade Practices Act 1974 that will benefit all businesses, including small businesses. The Trade Practices Legislation Amendment Bill (No. 1) 2005 (the Dawson Bill) assists small businesses in their dealings with large businesses, by implementing the Government’s policy that a notification process be made available for collective bargaining. This process reduces the administrative and legal burden on small businesses, and recognises that there may be public benefits in allowing small businesses to maximise their bargaining power in negotiations with larger businesses.

The Government endorsed recomendations made by the Senate inquiry into The Effectiveness of the Trade Practices Act 1974 in Protecting Small Business to clarify section 46 of the Trade Practices Act, to further protect small businesses from misuse of market power and accept changes to provide small businesses with greater protection from unconscionable conduct.

The Government created an additional Australian Competition and Consumer Commission (ACCC) Deputy Chairperson position. This was announced in July 2004 as part of the Government’s Committed to Small Business statement. The Government intends the position to be filled by a candidate who is experienced in representing small businesses.

In addition, the Government is committed to ensuring the Trade Practices Act is enforced vigorously by the independent ACCC. The 2006 07 Budget provided additional funding to the ACCC of $115.3 million over four years.

To ensure that competition regulation and enforcement keep pace with developments in relevant sectors, the ACCC holds liaison meetings with Government Departments, where the senior executives of each agency discuss trade practices matters of mutual interest.

Recomendation 2(b)
Agree.

The Government is committed to continuing to work with and support industry through the provision of education, training and research to develop dynamic and responsive supply chains. Building the capacity of the industry through continuous improvement in the supply chain and enhancing food safety and quality are all important in increasing output, market competitiveness, profitability, investment, innovation, export sales and employment in the agrifood sector.

In terms of research, Australia’s Rural Research and Development Corporations and Companies (RDCs) are significant contributors to research and development in key areas, including building more efficient and dynamic supply chains through a partnership approach with government. The Corporations will continue to focus their research in areas that are fundamental to future sustainability and competitiveness of the agrifood sector.

The Government also funds a number of other research and development programes that assist industry to be competitive. For example, the Cooperative Research Centre (CRC) Programe promotes long term strategic links and collaborations between researchers and industry. A number of CRCs, including the CRC for Beef Genetic Technologies, provide valuable assistance to the food sector at various points along the supply chain.

A key focus of the Government’s $114.4 million National Food Industry Strategy (NFIS) stimulates and support the development of leading edge ‘demand chain’ practices to improve operational performance along the food value chain (through the NFIS Food Chain Program and Food Safety and Quality Initiative). Funding for the NFIS is scheduled to end on 30 June 2007. The Government will evaluate the NFIS and consider any future support before June 2007.