Trade Practices Amendment (Guaranteed Lowest Prices - Blacktown Amendment) Bill 2009

The Trade Practices Act (Guaranteed Lowest Prices – Blacktown Amendment) Bill (“the Bill”), introduced by Senators Joyce and Xenophon on 24 June 2009, aims to curb tactics by “retail giants” that are targeted at threatening the existence of small retail businesses within the same geographic area.

If passed, the Bill will prevent certain corporations operating retail outlets from supplying consumers with products at a lower price than the lowest price being offered by a retail outlet within a distance of 35 kilometres. The new provisions will apply to corporations or related entities that operate more than five retail outlets in Australia under the same trading name.

There are exceptions to the rule, which include perishable goods, end of line and “deleted” items, and franchised operations where the franchisee operates 5 outlets or less within the 35 kilometre radius.

The Bill was created in response to a recent situation in the Sydney suburb of Blacktown, where independent petrol retailer Marie El-Khoury was taken out of business by a larger company-owned service station offering cheaper petrol prices in the same area. Senators Joyce and Xenophon argue that this type of practice by large corporations is anti-competitive in nature, given that once the smaller retailer is out of business, the larger business will then raise their prices, having gained a monopoly over the geographic area.

It appears unlikely that the Bill will become law as it is seen as overly protectionist, given that the Trade Practices Act 1974 (Cth) already provides protection for small retail businesses against corporations that have a substantial degree of power in the market.

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