A report of the Australian Competition and Consumer Commission’s activities

15.S87B Undertakings

EUREKA AUSTRALIA PETROLEUM PTY LTD (Eureka) On 15 December 2015 the ACCC accepted a s87B undertaking from Eureka trading as Coles Express, as part of the Informed Sources matter. Eureka has undertaken not to enter into any price information sharing service agreement that is similar to the one operated by Informed Sources, and not to give effect to any such arrangement at the expiration of the current term of its agreement with Informed Sources in April 2016. INFORMED SOURCES AUSTRALIA PTY LTD (Informed Sources) and PETROL RETAILERS On 22 December the ACCC accepted s87B undertakings from: BP Australia Pty Ltd (BP) Caltex Australia Petroleum Pty Ltd (Caltex) Woolworths Ltd (Woolworths) 7-Eleven Stores Pty Ltd (7-Eleven), and Informed Sources. The undertakings require that Informed Sources will not supply a petrol price information exchange service unless, it makes available, at the same time, the retail petrol price information that it provides to petrol retailers to: Australian consumers, and third party information service providers, consumer organisations, motorist organisations, research organisations and regulatory agencies carrying on business or operating in Australia, on reasonable commercial terms. The undertakings given by BP, Caltex, Woolworths and 7-Eleven require that they will not enter into or give effect to any price information exchange service unless, the petrol price information each receives is made available to consumers and third party organisations at the same time.

PETER McINNES PTY LTD (Peter McInnes) On 15 April 2014 the ACCC accepted an undertaking from Peter McInnes. The undertaking addressed the ACCC’s concerns that Peter McInnes had engaged in conduct that constituted or was likely to constitute resale price maintenance on four occasions by inducing or attempting to induce retailers not to sell KitchenAid stand mixers supplied to them at a price less than a specified recommended retail price. On 4 August 2015 Peter McInnes advised that the business was no longer operational and had been sold. A withdrawal of the undertaking was sought and provided by the ACCC on 20 October 2015.

16.Investigations

At the end of the December quarter the ACCC had more than 10 cartel investigations under way and a number of in-depth investigations into other types of anti-competitive conduct including secondary boycotts, misuse of market power and anti-competitive agreements.

Meat processing industry

The ACCC investigated allegations that nine meat processors collectively boycotted the prime cattle sale at the Barnawartha saleyard on 17 February 2015. The investigation commenced following reports that meat processors had agreed not to attend the sale at Barnawartha in response to the saleyard using pre-weigh selling. The ACCC conducted an extensive investigation of the conduct due to concerns that any agreement or understanding between the processors may have breached the CCA. To establish a breach the ACCC needed to demonstrate that there was an agreement and a commitment by at least one of the parties not to attend the sale.

The ACCC used its statutory powers to request information, data and documents from all of the nine processors involved. The ACCC followed this up by conducting a number of compulsory examinations of key individuals involved in buying cattle from the Barnawartha saleyard.

The investigation found that there was uncertainty before the sale about whether the Barnawartha saleyard would use a pre or post weigh selling method. It was also clear that certain processors strongly opposed the pre-weigh method but the evidence did not demonstrate that any of the processors entered an arrangement or reached an understanding not to attend the sale, which is required to establish a breach of the CCA.

The ACCC has recently formed an Agricultural Enforcement and Engagement Unit (AEEU) which has been provided with the information collected during the Barnawartha investigation and has also been closely following concerns raised by the sector during the recent Senate Inquiry into the effect of market consolidation on the red meat processing industry. As one of its priorities in 2016, the AEEU will focus on reviewing practices in the red meat industry that raise competition or fair trading concerns.

17.Agriculture Enforcement and Engagement Unit (AEEU)

The ACCC’s AEEU was established in August 2015.

This followed the release of the Government’s Agricultural Competitiveness White Paper. The ACCC has been provided with $11.4 million over four years to focus on agriculture market enforcement and engagement.

The Government will also appoint an ACCC Commissioner with responsibility for agricultural matters.

During the December quarter the ACCC commenced a comprehensive program of stakeholder consultation, meeting with a range of industry associations and government bodies from across the country. The ACCC has held over 20 meetings with major industry groups and government stakeholders. This initial engagement has focused on identifying the key competition and fair trading issues facing agriculture sector participants.

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