Xenophon Proposes Divestiture Laws as Solution for Anti-competitive Conduct

Independent Senator Nick Xenophon has reinforced his calls on the Federal Parliament to reopen its inquiry into the dairy industry by indicating he will introduce divestiture laws to allow the ACCC to apply to the courts to break up companies engaged in anti-competitive conduct, including abuse of market power.

In a media release published to his website the Independent Senator has indicated that, “(t)he move comes on the second anniversary of the milk price war, which saw both Coles and later Woolworths slash the price of their One Litre private label milk to $1.00”. In a swipe at the Coles ‘Down Down’ campaign, which uses the iconic Status Quo song ‘Down Down’ the Senator said “Unfortunately, more and more dairy farmers are finding they can relate to the lyrics of the song: I have found out you see / I know what you're doing / What you’re doing to me.”

Senator Xenophon is quoted as saying “that despite an extensive Senate inquiry into the issue – which reported in November 2011 – already close to 10 percent of Queensland dairy farmers have walked off the farm . . . For the past four months some farmers have been receiving 27c per litre and many need a minimum of 40c per litre all year round to make a living.”

The Senator expressed the view that if allowed to continue current pricing tactics could force fresh milk into becoming a niche or luxury item, with long-life milk being the norm as in France where only five percent of milk is fresh. Senator Xenophon further said “that divestiture powers (which already exist in the United States and the United Kingdom) effectively deal with market power by giving the courts the power to ‘break up’ companies if market power is abused”.

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