Legislation
Trade Practices Amendment (Guaranteed Lowest Prices - Blacktown Amendment) Bill 2009
Overview
The Bill was introduced by Senator Xenophon and Senator Barnaby Joyce was drafted by Assoc Prof Frank Zumbo. In his second reading speech, Joyce began:
Small business in this nation has been under a sustained and carefully orchestrated attack for years, where larger, often retail giants, put ever increasing pressure to bear on smaller independents—who are mostly “mum and dad” businesses. These mum and dad businesses are the lifeblood of the community, especially in rural and regional Australia. They are the forgotten people considered to be dispensable by the free marketeers. ...
The Blacktown Amendment is designed to curb the anti-competitive practice of geographic price discrimination. The Blacktown Amendment proposes to ensure that big businesses will charge the same price for the same product in the same geographic region, which is within 35km radius of adjacent retail outlets operated under the same trading name by a corporation or related entity. Same price includes any offer based on a discount, rebate, credit or allowance offered to customers.
In his second reading speech Xenophon stated (amongst other things):
... we are proposing the Blacktown Amendment whose purpose is to deal with geographic price discrimination.
The Blacktown Amendment does this by stating that a company must, at a retail outlet operated by the corporation, sell or offer to sell a particular product to a consumer at a price being the lowest price the product is offered for sale at the same time at any retail outlet operated by the company under the same trading name within a distance of 35 kilometres. ...
Long title
"A Bill for an Act to amend the Trade Practices Act 1974 to reduce predatory pricing by requiring corporations to offer and supply products at consistent prices across adjacent markets, and for related purposes"
Senate Inquiry
A Senate Inquiry recommended against passage of the bill, finding that 'there are legitimate operational reasons as to why the price of a good may vary between a company's metropolitan stores', that 'the bill does not differentiate between price discrimination that is competitive and advantages the consumer with lower price outcomes and price discrimination that is non-competitive and possibly predatory and is of disadvantage to consumers' and noting that the committee had 'grave concerns that this legislation may unintentionally result in higher prices for consumers for retail goods as a result of uniform pricing with no "guaranteed" lowest prices being offered at all.'
Key provisions
The bill proposed to insert a new s 46C:
46C
(1) A corporation must, at a retail outlet operated by the corporation or a related entity, supply or offer to supply a particular product to a consumer at a price being the lowest price the product is supplied or offered for supply at the same time at any retail outlet operated by the corporation or a related entity under the same trading name 11 within a distance of 35 kilometres. 12
(2) The rule set out in subsection (1) is the Guaranteed Lowest Prices Rule.
(3) Subject to subsection (4), the following are to be disregarded for the purposes of subsection (1):
(a) a price of a product supplied or offered for supply at a genuine factory, warehouse, or clearance outlet;
(b) a price of a product marked down because the outlet is genuinely closing down;
(c) a price of a product marked down because the product is imminently perishable;
(d) a price of a product marked down because the product or its packaging is damaged;
(e) a price of a product marked down because the product is to be permanently removed from the range of products supplied or offered for supply at the retail outlet;
(f) a price of a product marked down because the product has deteriorated in value as a result of being on display in a retail outlet for a substantial period of time, having regard to the nature of the product
(4) Where the corporation or a related entity operates more than one of the outlets referred to in paragraph (3)(a), the Guaranteed Lowest Prices Rule applies in relation to each of those outlets.
(5) Where a corporation or a related entity offers a discount, rebate, credit, allowance, or special deal to consumers in relation to a product or products to which the Guaranteed Lowest Prices Rule applies, it must, where the terms and conditions relating to discount, rebate, credit, or allowance or special deal are met, offer the same discount, rebate, credit, allowance, or special deal in relation to that product or those products at each retail outlet covered by the Guaranteed Lowest Prices Rule.
(6) Where a corporation or a related entity imposes a surcharge on consumers in relation to a product or products to which the Guaranteed Lowest Prices Rule applies, it must impose the surcharge in relation to that product or those products on the same terms and conditions at each retail outlet covered by the Guaranteed Lowest Prices Rule.
(7) Subsections (1), (4), (5) and (6) do not apply to a corporation where that corporation or a related entity operates five retail outlets or less in Australia under the same trading name.
(8) In this section:
price means the price at which the product is available for purchase by any member of the general public.
retail outlet operated by, in relation to a corporation or a related entity, means a physical establishment where products are offered for sale to the general public and where the corporation or a related entity sets the price at which the products are offered for sale.
trading name, in relation to a corporation or a related entity, means the name that the corporation or a related entity trades under or the name by which it is known to its suppliers or customers.
Discussion
The bill was defended by its author in the following paper:
Frank Zumbo, 'The Blacktown Amendment: Dealing effectively with geographic price discrimination' (2011) 19 AJCCL 33
