Back to NCP Review of the Uniform Trade Measurement Legislation Index

OUTCOMES OF SCOPING STUDY

Restrictions identified

The consultants' report to the Review Committee concluded that the potentially anti-competitive provisions of the trade measurement legislation fell into three areas: the method of sale; the use of measures and measuring instruments; and participation in the trade measurement industry.

Key restrictions considered in the report related to the method of sale of - meat, beer and spirits; and pre-packaged goods. Meat, other than packaged meat, must currently be weighed and priced per kilogram, at the point of sale. Spirits must be sold by volume, beer glasses must be marked with their volume and pre-packed goods must be labelled with the packer name and address and a quantity statement. Certain prescribed goods pre-packed in sizes outside a schedule of sizes must be unit priced (eg marked with the price per kilogram)

The report noted other minor restrictions on competition which were considered by the consultants to be sound, imposing few costs while potentially generating widespread and significant benefits. These restrictions relate to the oversight of measurement standards, the prohibition of end-and-end weighing at public weighbridges and the licensing of service organisations and public weighbridges.

It was argued that in practice, the restrictions on the sale of beer and spirits appeared to have little if any adverse impact on competition but provided benefits to consumers and are justifiable restrictions.

The restrictions on pre-packaged goods were also considered by the consultants to be justifiable, as they generally help inform consumers while appearing to impose few costs. However, they did not find it possible to justify the general practice of unit pricing of pre-packed goods.

The consultants considered the restriction on the sale of non-prepacked meat to impose significant costs. In their report they argued that it limits the product range offered to consumers, may favour supermarkets and grocery stores over other retailers of non-packed meat and in Queensland favours chicken and fish over red meat. The consultants noted, however, that the restriction also provides benefits for some consumers by facilitating price comparisons between retailers.

The report therefore recommends that if the Review Committee wishes to maintain the restrictions on the sale of non-prepacked meat and unit pricing of pre-packed goods, a detailed public benefit test would be required. The consultant states that this could cost in the order of $200,000 with a significant share of the costs arising from the need for detailed surveys of consumer attitudes

The consultants' report recommends that such a review would be unnecessary if these restrictions were relaxed and considers that a reasonable case could be made for relaxation based on the work to date.

Consultants' recommendations for further public benefit testing

The consultants' assessment prepared for this review points to the restrictions on the competition in the trade measurement industry falling into two categories:

1) those that appear to provide net benefits on the basis of economic principle and the consultation to date. In this case it appears unlikely that the objectives of the legislation could be achieved without anti-competitive legislation and there is no overt concern about or opposition to the restrictions; and

2) those that could not be shown based on the research to date to generate benefits that outweigh the costs. In this case further research and consultation is required if the restrictions are to be retained.

The restrictions on the sale of non-prepacked meat and on the unit pricing of pre-packed goods fall into the second category. The consultant's assessment is that further work is required before a case could be made to retain restrictions on competition. Their report claims there is a reasonable case for removing such restrictions and, if this assessment is accepted and acted upon, further investigation is unnecessary. If the Review Committee considered it desirable to retain such restrictions, a more detailed PBT would be required of these restrictions only. The consultants anticipate that such a PBT would be a national one that considered all jurisdictions given the potential for differences between jurisdictions (particularly with respect to meat).

In summary the consultants key recommendations are that :

1) no further investigation is required of most of the restrictions to competition in the uniform trade measurement legislation. These restrictions include the oversight of measurement standards, the prohibition of end-and-end weighing at public weighbridge and the licensing of service organisations and public weighbridges; and

2) a detailed public benefit test would be required if the Review Committee wishes to maintain the current restrictions on the sale of non-prepacked meat and the unit pricing of pre-packed goods.

The report therefore recommends that if the Review Committee wishes to maintain the restrictions on the sale of non-prepacked meat and unit pricing of pre-packed goods, a detailed public benefit test would be required. The consultant states that this could cost in the order of $200,000 with a significant share of the costs arising from the need for detailed surveys of consumer attitudes

The consultants' report recommends that such a report would be unnecessary if these restrictions were relaxed and considers that a reasonable case could be made for relaxation based on the work to date.

Estimated cost of PBT

The consultant considered that should the Review Committee wish to further explore the case for maintaining the restrictions on the sale of non-prepacked meat and the unit pricing of pre-packaged goods, a PBT would be required. This they estimated would cost in the order of $200,000 with a significant share of the costs arising from the need for detailed surveys of consumer attitudes. In the view of the consultant, the restrictions on the sale of non-prepacked meat could only be maintained if it could be demonstrated from a survey that the potential gains to some consumers outweighed the costs to other consumers and to producers. A survey of consumer attitudes was also considered by the consultants to be desirable in examining the unit pricing of pre-packaged goods, but not essential. Targeted interviews with suppliers were also considered to be important in both cases if a rigorous case was to be made.

Back to NCP Review of the Uniform Trade Measurement Legislation Index