National Farmers' Federation

A win for competition as Government brings in new penalties for unfair contract terms

The National Farmers’ Federation welcomes reforms to the Australian Consumer Law regarding unfair contract terms (UCTs), saying they will create a fairer playing field for farmers and small business.

NFF President David Jochinke said the use of UCTs was a clear demonstration of what Australian farmers had known for a long time – there’s not enough competition in the economy.

“It’s remarkable that before now there was no penalty for the use of UCTs. These reforms will hold businesses to account for the use of UCTs,” he said.

Yesterday’s reforms provide a strong deterrent with new penalties for the use of UCTs.

Businesses now face penalties of up to $50 million – three times the value of the “reasonably attributable” benefit obtained from the conduct, if the court can determine this, or 30 per cent of adjusted turnover during the breach period.

“The NFF acknowledges the Australian Government’s work introducing these reforms and supporting fair treatment of farmers and small businesses across the country,” Mr Jochinke said.

“While the reforms are a step in the right direction, they’re not the end of the journey.

“There is still a lot of work the Government must do to promote competition in Australia and ensure a level playing field for farmers and small businesses.”

Changes to UCTs was a key recommendation of the ACCC’s 2020 Perishable Agricultural Goods Inquiry, but it wasn’t the only recommendation from this report. This Inquiry contains a host of recommendations the Government should introduce to support Australian farmers across the country.

“Unfortunately, farmers still feel a real threat of commercial retribution for speaking out about unfair treatment from businesses across the supply chain. Today’s reforms won’t help that.

“That’s why the NFF continues to call on the Australian Government to deliver a full suite of competition reforms.”

These reforms include:

  • A framework outlawing Unfair Trading Practices
  • Mandatory codes of conduct for agricultural supply chains with significant market concentration
  • Increased penalties for anti-competitive conduct
  • Increased resourcing of the ACCC
  • Measures to increase market price transparency across the supply chain
  • A nationwide analysis of barriers to entry faced by new firms.