The Head of the Australian Competition and Consumer Commission (ACCC) Rod Sims has again called for those who feel they have been unfairly treated by major corporations in concentrated markets to come forward and report it to the ACCC, and has even suggested some degree of anonymity for 'whistleblowers" who would otherwise lose their business the minute they complained.

In a speech to the Australian-Israel Chamber of Commerce, Rod Sims discussed the problem of concentrated markets in Australia. He stated;

"Australia has many concentrated markets. This is partly a function of our geography – the sheer size of the country and the distance from other markets. Indeed, most market sectors are dominated by two to three main players, and in a few sectors there is only one dominant player.These sectors in particular are ones that need to be watched carefully to ensure that there are not mergers or arrangements that substantially lessen competition, or where the obvious market power is not misused to prevent or damage competition.

Some sectors have been the focus of considerable community interest, such as fuel and supermarkets. There are intense public concerns which I hear about daily. For example, there are concerns about co-ordinated price movements in fuel, and the way supermarkets may deal with their suppliers or increase their selling of home brands. The ACCC has not yet formed the view that there are breaches of the Act occurring; but our priority in 2012 will be to determine whether or not there are breaches in these important sectors."

Subsequent media reports (see here and here) suggested that the speech indicated that the ACCC was going to more closely scrutinise arrangements between Supermarkets and their suppliers. However, a close reading of the comments attributed to Mr. Sims presents a slightly different picture, as the following quotes highlight:

If people have concerns, come to us with the evidence. It is all very well for some of the industry representatives and others to talk about behaviour that is going on there, but we need evidence.......  They can come and talk to us confidentially and if we can get a number of people talking to us confidentially and we can build up a picture then we can take action in a general sense rather than doing it in a way that exposes that individual. 

In other words, someone has to bring all the evidence to the ACCC, and if there are multiple examples of other aggrieved suppliers bringing forward similar  evidence, then the ACCC might investigate further.

However, as pointed out recently in the Farm Institute newsletter, this is a meaningless threat for two reasons. Firstly, under the legislation there is a need to prove that the unconscionable conduct or predatory pricing has been undertaken for the purposes of lessening competition, with the ACCC somehow required to determine the intent of the action, and not just whether it occurred or not. Secondly, in concentrated markets, virtually all the market information that is necessary to make a judgement on the fairness or otherwise of actions is held by the major corporation, and there is no way a small-scale individual supplier could ever provide enough information to support action by the ACCC.

Australian competition law empowers the Minister to impose price monitoring in concentrated markets - a practice that is a standard arrangement in both the USA and Europe - and this is the only way there is ever likely to be any evidence available of illegal practices (if they are in fact occurring). Meanwhile, Australia's largest tomato grower has just been placed in administration, amid suggestions that recent Supermarket pricing policies for fruit and vegetables and contract arrangements may have been one of the reasons for the failure of the business.