On 14 October 2015, ACAPMA CEO Mark McKenzie joined 24 other Industry Association Leaders in a meeting with the Federal Treasurer and the Federal Minister for Small Business to push for improvements to Australia Competition Law. The push is vital for our industry to see that we never again see the type of destruction to market competition in our industry that occurred as a result of the introduction of fuel shopper dockets.

Billed as the biggest review of Australia’s Competition Law in more than 20 years, the final report of the Harper Competition Review was released in March 2015. Named after its’ author, Professor Ian Harper, the report made 56 recommendations for improvements in Australia’s Competition Laws.

It is understood that all but one of these recommendations has been positively considered by the Federal Coalition Government.

The last, a recommendation for changes to Section 46 concerning the potential misuse of market power by organisations with a large concentration of market power, is still under consideration by the Government.

This particular provision is of historical relevance to Australian petroleum marketers (i.e. wholesalers and retailers) given the decade long experience with the destruction of market competition caused by the introduction of shopper dockets by the two major grocery chains.

“While this issue was eventually resolved by an enforceable undertaking between the ACCC and the supermarket chains involved, the substantial time taken to resolve this issue resulted in substantial damage to competition and highlights the inadequacy of the existing legislative safeguards against misuse of market power”, said ACAPMA CEO Mark McKenzie.

The current legislation requires that, in order for any allegation of misuse of market power to be proven under existing law, the applicant must prove that the actions of the organisation with a high concentration of market power are lessening competition AND that this organisation intended to do so.

“It is this latter requirement to prove that the organisation intended to damage competition that is at the crux of the matter. Short of having a ‘smoking gun’ email between business managers saying as much, this requirement is impossible to prove”, said Mark.

The ineffectiveness of the current provisions, known as Section 46, is demonstrated by the fact that there have been no successful prosecutions for misuse of market power for more than a decade.

“This is despite the adverse experience of our industry and the grocery industry with respect to the operation of shopper dockets over the past 10 years”, said Mark.

The issue has become highly politicised as a result of the lobbying by a small number of Australia’s largest organisations who have a vested interest in the legislation being retained in its current form – with their argument for retention of the current laws being prosecuted by the Business Council of Australia (BCA).

“The BCA, in particular, has been somewhat mischievous in trying to portray this issue as one of small business seeking special protections against big business and that it is in the public interest for the existing law to be retained”, said Mark

“But as we know in our industry, the need for effective safeguards against misuse of market power important for all organisations – large and small – and that no public interest is served by damaging market competition as occurred with fuel shopper dockets”, said Mark.

Given the apparent effectiveness of the BCA’s lobbying efforts in stalling Federal Government consideration of this matter, the leaders of 25 Industry Associations (including ACAPMA) have banded together to call for implementation of the 56th recommendation for changes to the provisions of Section 46.

This coalition of industry associations met with the Federal Treasurer, the Hon Scott Morrison, and the Small Business Minister, the Hon, Kelly O’Dwyer at Parliament House yesterday.

The meeting was also attended by a number of other Liberal and Coalition MP’s including Senator Matthew Canavan, Brett Whitely MP, Craig Laundy MP and representatives from the offices of Burt van Manen MP, Senator Barnaby Joyce and Senator John Williams.

The meeting was preceded by the release of a joint statement by industry associations calling for changes to Section 46, which can be viewed here.

“The meeting was very constructive with both the Treasurer and the Small Business Minister listening to the case for change and acknowledging the significance of this issue for all businesses – both big and small.

The Treasurer indicated that he had already sought a briefing from Professor Harper since being appointed and remained open minded to the views of both sides, but cautioned that he would take the time to fully understand this issue before making a decision.

“Our key message yesterday was that it was wrong to believe that this was just about small businesses seeking special protections from big business – this issue is really about addressing a deficiency in competition law that affects big and small business alike and for anybody to suggest otherwise is simply mischievous”, said Mark.

“We noted that Australian Telecommunications Law provides good safeguards against misuse of market power – effectively an industry that is dominated by big business – and we are simply seeking similar provisions for the rest of Australian commerce and industry”, said Mark

In a post meeting discussion, the industry leaders committed to continue the campaign and work collaboratively to secure changes to Section 46 that will improve the effectiveness of competition laws for all of their members.

Further information about this initiative can be obtained by contacting the ACAPMA Secretariat on 1300 160 270.