Thursday, 1 June 2017


It was really encouraging to get this news today from the Australian site Brews News. The TLDR is that a Melbourne law firm is enlisting breweries that want to be part of a class action against Australia’s corporate brewers for breaching competition law by using tap contracts.

I’m in no position to tell whether the law firm, Adley Burstyner, have the ability to succeed, but even if they don’t it’s keeping the issue alive, while Australia’s ACCC take a long time with their investigation into the same practice.

Now, speaking as a legal lay person, the Australian Competition and Consumer Act 2010 and the New Zealand Commerce Act 1986 are probably intended to do the same thing. But it looks like the Australian law might have more to say about anti-competitive behaviour. I say that because Part 2, Section 27 of the NZ Act says only “No person shall enter into a contract or arrangement, or arrive at an understanding, containing a provision that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.” Now the Australian Act says something similar about entering into a contract that is “likely to have the effect of substantially lessening competition”, but it also outlaws “exclusionary provisions”.

My lay opinion has always been that New Zealand tap contracts breach the spirit of the Commerce Act, but might stay within the letter of it, because it takes thousands of them to collectively “substantially lessen competition”, while it could be argued that one on its own can’t substantially lessen competition. But that clause about “exclusionary provisions” might give the Australian Act more teeth.

So it’s conceivable that the corporate brewers in Australia are destined to be forced to stop this practice and maybe pony up a lot in fines or compensation for having done it all this time. But at the same time the Commerce Commission in NZ have already seen fit to deem the practice legal. They have their version of competition law and we have ours, and that’s the prerogative of nation states. Or is it?

The Trans Pacific Partnership, and potentially other future free trade agreements, has a little bit to say about competition law. What I saw when I looked into it seemed pretty vague. It basically says that members should have some competition law to eliminate anti-competitive behaviour.

But what if producers and manufacturers in one country, hoping to export to another that they’re in FTA negotiations with, raise the stakes? It would be highly fanciful to think that Australia’s smaller brewers, fresh from a legal triumph over that country’s mega breweries, might get involved in FTA negotiations with New Zealand or other TPP nations over the competitiveness of their beer markets. But what about free trade negotiations with Europe?

Is it treason to hope that a foreign power will bully us into getting our anticompetitive house in order?