Senator Joyce, today, felt it necessary to refute some claims made by Mr Luscombe, CEO Woolworths, at the National Press Club today regarding the ‘Birdsville Amendment’ to outlaw predatory pricing under the Trade Practices Act.

“The Birdsville Amendment to s 46 of the Trade Practices Act is a balanced and clearly targeted law and was introduced after a period where predatory pricing laws have become ineffective since the Boral decision and no other amendments have ever been constructively suggested by big business to deal with this issue.

“The Birdsville Amendment stops a company with a substantial market share from selling or offering to sell goods or services below cost for a sustained period of time for the purpose of:

a) eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market; or
b) preventing the entry of a person into that or any other market; or
c) deterring or preventing a person from engaging in competitive conduct in that or any other market.

“I respectfully disagree with Mr Luscombe’s claims. The Birdsville Amendment will not in any way stop legitimate and pro-competitive discounting, the amendment will only be triggered by below cost pricing where that occurs over an extended period of time for an anti-competitive purpose.

“Any claim that the Birdsville Amendment will stop discounting is nothing more than a scare campaign and should be dismissed.

“What small business and consumers really want to know is whether a major market share player sells below cost and if so for how long and for what purpose?

“For instance if Woolworths never engages in predatory pricing, as stated by Mr Luscombe at the National Press Club today, then they have nothing to fear from the Birdsville Amendment.

“If a major market share player does sell below cost, then the question is for how long? If it is for a short period and/or to match competition, then it has nothing to fear from the Birdsville Amendment.

“If a major market share player sells below cost for an extended period to match competition, then it has nothing to fear from the Birdsville Amendment.

“If a major player in a market drops their price below cost for the purpose of putting other competitors out of business, then they are in breach of this law and I believe the Australian people will suffer because a market that is overcentralised extracts its resultant premium out of the consumer.

“There are a few issues that have to be protected here: the right of the Australian citizen to go into business; to buy and sell product at a profit; to prevail or fail by reason of service, management or product but not by reason that another major player belligerently sells below cost proximate to them for the purpose of sending them broke.

“The Birdsville Amendment will not stop pro-competitive discounting. It will not stop any company, including Woolworths, from matching a competitor’s price. It will not stop Christmas or any other sales. It will not stop clearance sales or specials.

“The Birdsville Amendment will only stop below cost pricing for prolonged periods of time aimed at destroying competition. Such conduct is designed to remove vigorous and independent competitors from the market to enable large companies to dominant markets and raise prices.

“Numerous US States have laws that outlaw below cost pricing. These laws have been shown to be pro-competitive in reducing prices for consumers.

“For too long below cost pricing for prolonged periods of time aimed at destroying competition has gone unchallenged as the existing s 46 of the Trade Practices Act has been rendered ineffective by a number of High Court decisions.

“The Birdsville Amendment will change all that for the benefit of small business participants in the market and consumers. Major players should accept that and stop being alarmist over a law that will restore the effectiveness of the Trade Practices Act and protect competition in the interests of consumers.

“The Australian people and small business want this issue dealt with; they want it dealt before the election and their rights and their wishes have been addressed by this amendment.” Senator Joyce said.