Farmers have welcomed the Australian Government’s proposed merger reforms, but warn more work is needed to fix entrenched competition problems.
On Wednesday Treasurer Jim Chalmers announced mergers and acquisition reform in an attempt to improve competition and productivity.
NSW Farmers Business, Economics and Trade Committee chair John Lowe said while the proposed reforms were a significant step in the right direction, they were only one part of the problem.
“It’s clear the Australian public wants to see fairer competition laws that protect farmers and families in the marketplace,” Mr Lowe said.
“Greater scrutiny of mergers that could entrench market power is a good thing, but what about those that have gone before? These reforms cannot unscramble those eggs.
“This needs to be part of a set of sweeping reforms that could include divestiture powers where one company dominates the market and abuses its power.”
Under the proposed reforms, companies will be required to notify the ACCC of mergers above a certain threshold, better define an acquisition that will entrench market power, and address creeping acquisitions mergers within the previous three years, irrespective of whether those mergers were individually notifiable.
“Australians believe in a free and fair society, so there needs to be greater regulation where companies could reduce fairness by growing too big,” Mr Lowe said.
“We see that in the dairy industry or the meat processing industry, where mergers have led to concentrated market power that disadvantages farmers and families on either end of the food supply chain.
“These proposed reforms are a good start on delivering meaningful competition reform across the economy however, more will need to be done.”
