Did Safeway have a substantial degree of market power in the relevant market and did it take advantage of that power?
1036 The Commission submitted that the relevant market in respect of which it said Safeway had a substantial degree of market power was the wholesale market for the acquisition of bread in Victoria. It was said that Safeway was an acquirer of bread in that market. Safeway, in contrast, submitted that the relevant market to consider was the total bread market at both wholesale and retail levels.
1037 There was little dispute between the parties as to the existence of the factors that led to the conclusion that there was a market in Victoria for the supply, on a wholesale basis, of bread products to food retailers. It was accepted that at relevant times:
· There was a demand for the supply of bread products on a wholesale basis in Victoria.
· There were no products (other than other bread products) that were substitutable, or in close competition, with bread products in Victoria.
· Tip Top, Sunicrust and Buttercup, in supplying bread products in Victoria on a wholesale basis had not been constrained to any significant degree by the prices at which other non‑bread products were supplied by other wholesalers in Victoria.
· Tip Top, Sunicrust and Buttercup had been in close competition with each other in supplying bread products in Victoria on a wholesale basis.
I am also satisfied, although it was not specifically admitted by Safeway and Mr Jones, that:
· The demand for the supply of bread products on a wholesale basis in Victoria was derived from the demand for bread products by customers of food retailers in Victoria.
· Consumers of bread products in Victoria were unlikely to switch from bread products to other products to any significant extent.
1038 The critical issue between the Commission and Safeway was the identification of the boundaries or scope of the market in respect of which it was said that Safeway had a substantial degree of market power. Safeway, in substance, submitted that there was a total bread market which comprehended both wholesale and retail levels. Safeway adopted this position because of what it said was the interaction and impact of activities at the retail level with the wholesale level. Safeway also submitted that hot bread shops should be included in the market because of their ability to constrain the conduct of other sellers at the retail level.
1039 As was pointed out in Queensland Wire (supra) at par 1018 above, the definition of the market and the assessment of the relevant degree of market power are part of the same analytical process. The conduct of Safeway in issue is that relating to the terms of its dealings with the three plant bakers in relation to its acquisition of bread. Accordingly, the relevant functional level is the wholesale level. It is at that level that the relevant alleged abuse of power or proscribed purpose arose. I do not therefore consider it appropriate to define the market more widely to include the retail functional level notwithstanding that the extent of competition at that level may have had a constraining effect on the ability of any wholesaler to charge a monopoly price or on the ability of any purchaser at the wholesale level to influence the terms of trade at the retail level. It does not necessarily follow from the fact that it may be appropriate to include at the retail functional level all sellers of bread, supermarket chains, independent stores, in‑store bakeries and hot bread shops, that it is appropriate to include any of those retail outlets in the upstream market at the wholesale level to determine the extent of Safeway's market power and any use of it that occurred at that level.
1040 Safeway was a significant purchaser of bread from manufacturers of bread throughout Victoria, and it retailed bread through over 130 stores throughout Victoria. The three major plant bakers, Tip Top, Sunicrust and Buttercup manufactured approximately 80% of all bread products manufactured for retail supply in Victoria.
1041 There was considerable evidence and debate as to whether hot bread shops, independent bakers and in‑store bakeries should be included in the market for the acquisition of bread by wholesale. The Commission and its economist witnesses excluded hot bread shops from consideration in determining the existence and extent of Safeway's market power. They contended that the hot bread shops did not constrain prices or terms of trade at the wholesale level because they were not perceived to be in competition with the supermarket chains at the retail level, having regard to the nature and variety of the bread products they sold.
1042 However, both Professor King and Professor Williams accepted that if the plant bakers were correct that the hot bread stores were competing at the retail level with the stores selling plant baked bread, then the hot bread shops would constrain prices at the wholesale level. Professor Williams accepted that if it was established that hot bread shops and independent bakers were alternative sources of supply to independent supermarkets against whom Safeway purported to exercise market power, it would be necessary to take into account those sources of supply in defining the wholesale market. Professor Williams had not taken those sources of supply into account as he assumed hot bread shops had no relevant constraining effect. He had accepted that if it was established that independent bakers and hot bread shops had a significant constraining effect upon the way Safeway exercised its power derived from the wholesale market, then it was necessary to take into account the products sold by the independent bakers and hot bread shops in determining the extent of Safeway's power in that wholesale market.
1043 Safeway submitted that the existence of competition from hot bread shops in the retail market had a flow‑on effect into the wholesale market for the acquisition of bread, which denied Safeway having substantial power in that market. The argument went this way - the price at which a retailer bought bread in the wholesale market dictated the retail price, and if a retailer was competing against hot bread shops, the hot bread shops acted as a constraint on the ability of a retailer to charge what it liked so that the influence of the hot bread shops acted as a constraint on the terms of trade and price to be exacted by sellers in the wholesale market upstream. It was in support of that argument that Safeway relied on the material supplied to the Trade Practices Commission and the Commission's conclusions in relation to the Goodman Fielder Limited/Bunge Industrial Pty Ltd joint venture proposal in 1995.
1044 The influence of hot bread shops is a relevant consideration to take into account in determining whether a merger of flour millers who are vertically integrated can affect the price that retailers who purchase bread from them are able to charge at the retail level. However, in the merger context the Commission was concerned to determine whether the plant bakers had the power to raise prices at the wholesale level and thereby lessen competition at the retail level.
1045 In the present circumstances a different issue arose - it was the power of Safeway to influence the terms of trade upon which the plant bakers sold bread at the wholesale level. That issue is not concerned with the power of Safeway to raise prices at the retail level, those prices being constrained by the conduct and prices of the hot bread shops as well as other retail outlets. Put shortly, competition in the retail market did not provide any significant restraint on the ability of Safeway to exercise a substantial degree of market power as an acquirer of bread in the wholesale market and to obtain terms of trade at that level, nor did it provide any significant restraint on the plant bakers from whom Safeway acquired bread in relation to the terms of trade they imposed on purchasers from them. I therefore do not accept that the relevant market for the purpose of considering Safeway's market power in the present context is the total bread market comprising transactions at both the wholesale and retail levels.
1046 There was conflicting evidence as to the significance and relevance of hot bread shops. There was some evidence that bread purchased from a hot bread shop was to be eaten on the day of purchase as it became stale more quickly than plant baked bread. There was also evidence that the attraction of hot bread shops was the wide product range they offered and that their prices were frequently higher than the prices of comparable bread sold in supermarkets. Mr Brookes did not see the hot bread shops as a serious threat to Safeway's business because of their pricing structure and their product range although he regarded it as important to be competitive with them on price, particularly in relation to Code C 680g bread.
1047 In 1994 and 1995 Bakers Delight operated a substantial chain of franchised hot bread shops in Victoria. At that time approximately 20% of its sales comprised plain white blocks of bread. Safeway used its in‑store bakeries as its means of meeting competition from the hot bread shops. Mr Lord, the Managing Director of Bakers Delight, said that Bakers Delight discounted 680g bread from time to time, and he agreed that his organisation competed with other sellers of bread.
1048 Mr Jones recognised hot bread shops as a source of competition for Safeway. He recorded this view in a presentation to Safeway store managers in April 1994 when he said that:
"The market of bread is predominantly heading in the area of 'fresh' ie Instore bakeries, hot bread shops, such as Brumbys'."
1049 The view that hot bread shops were providing increasing competition at the retail level of bread sales was shared by a number of retailers. A number of Safeway employees saw hot bread shops as competitors at the retail level. So did the plant bakers.
1050 Mr Kadir, Tip Top's National Sales Director, said that the products of hot bread shops competed at the retail level with comparable products sold by Tip Top to its retail customers for resale. He said that industry journals showed that in 1994 and 1995 hot bread shops accounted for 30% of the total retail sales of bread products. He saw the sales of hot bread shops affecting the retail sale of Tip Top brands. His views on the impact of sales of hot bread shops on the retail sales of Tip Top bread were confirmed by a Tip Top monthly business report in May 1994 and a Tip Top Business Plan in April 1995. Those reports showed that in 1995 there were 804 hot bread shops in Victoria and 167 in‑store bakeries. Mr Kadir's views were shared by Mr Guthridge, Tip Top's General Manager and Mr Maine, Tip Top's State Sales Manager.
1051 The other plant bakers held similar views. Mr Linton, Buttercup's Victorian Sales Manager, saw the retail market share of the three plant bakers declining due to the activities of the hot bread shops and the in‑store bakeries. This view was shared by Mr McLeish and Mr McDowall of Sunicrust. Sunicrust's Business Plans for 1994 and 1995 recorded the extent to which competition from hot bread shops and in‑store bakeries was taking retail market share away from the three major plant bakers.
1052 The involvement of hot bread shops in the market for the retail sale of bread was recognised by the plant bakers and the Trade Practices Commission at the time of the consideration by the Commission of the proposed joint venture by Goodman Fielder Limited and Bunge Industrial Pty Ltd in 1995. The submission to the Commission to enable it to consider the impact of the Act on the proposal included material provided to the Commission on a confidential basis. It was admitted in evidence in confidential exhibits. It is not necessary to rehearse that material. It is sufficient for present purposes to note that the Commission accepted that one of the markets in which the proposed joint venture would operate was the supply of bread which included bread supplied by plant bakers, hot bread stores and in‑store bakeries.
1053 In May 1995 George Weston proposed to acquire the baking and milling assets of Waterwheel Holdings Limited in Victoria and presented a confidential submission to the Trade Practices Commission. Again the Commission took the view that one of the relevant markets was the product market for the supply of bread which included bread supplied by plant bakers, hot bread stores and in‑store bakeries.
1054 I am satisfied that hot bread shops and in‑store bakeries should be included in the market which existed in 1994 and 1995 for the retail sale of bread. However, notwithstanding the extent of price competition at the retail level between hot bread shops and retailers of plant baked bread, and the influence that that may have had on the level of prices which plant bakers might be able to charge at the wholesale level, I do not consider that hot bread shops should be included as suppliers in the wholesale market for the acquisition of bread.
1055 There was little evidence that hot bread shops undertook wholesaling activities. The Trade Practices Commission's staff discussion paper, prepared to enable the Commission to consider the proposal put forward by Goodman Fielder Limited and Bunge Industrial Pty Ltd, stated that there was a growing trend for route trade customers to be supplied by local hot bread shops and that local hot bread stores were taking an increasing share of small local routes. Safeway submitted that a number of Tip Top monthly business reports in 1995 noted that Tip Top had been able to supply customers who had previously been supplied wholesale by hot bread shops. Those reports showed that there were some examples of Tip Top supplying retailers who had been supplied by hot bread shops, but the reports do not warrant Safeway's submission, or the conclusion, that Tip Top "regularly won business supplying customers who had been supplied wholesale by hot bread stores".
1056 Safeway relied upon a Sunicrust document prepared in October 1995 which noted that "Hot bread shops continue to penetrate the traditional plant baker's market particularly in route trade, food service, and Sunday supply to grocery outlets". But there was no evidence as to the areas, or extent, of that penetration or the level that it had attained.
1057 In relation to the issue of its market power, Safeway placed substantial significance on the conclusions reached by the Trade Practices Commission in 1995 in its consideration of whether the joint venture proposal by Goodman Fielder Limited (which included Buttercup) and Bunge Industrial Pty Ltd (which included Sunicrust) might contravene s 50 of the Act. The proposal was that a joint venture company would acquire their baking, milling and wheat starch operations. The Commission ultimately concluded that the merger would not substantially lessen competition in the market for the wholesale supply of bread products. It concluded that hot bread shops should be considered as part of the market for the retail sale of bread products as they were providing significant competition to the retail sellers of bread purchased from the two wholesalers. Because of price competition at the retail level between retail outlets such as chain stores and independent supermarkets on the one hand and hot bread shops on the other hand, the plant bakers were constrained at the wholesale level in the prices they could charge the retailers because of the price competition these chain stores and supermarkets would meet from the hot bread shops.
1058 However, the conclusions of the Commission in the context of a s 50 analysis do not translate easily into a s 46 context. The issue before the Commission in the merger context was whether the combined market power of the two organisations, Goodman Fielder Limited and Bunge Industrial Pty Ltd, would have such an effect on the price of bread in the retail market that competition in that retail market would be lessened substantially. The issue before the Court in a s 46 context is different. Unless hot bread shops are to be taken into account and considered in the context of the wholesale market for the acquisition of bread products from bread manufacturers, they are not a relevant consideration at the level of analysis relating to taking advantage of market power or to whether the proscribed purpose existed.
1059 I exclude bread manufactured by hot bread shops in this context of the wholesale market as I do not consider that their output had an impact on the manner in which, and the extent to which, Safeway made purchasing or sale decisions or exercised its power in the wholesale, or for that matter any retail market. Further, hot bread shops were not an alternative source of distribution for the plant bakers as they were vertically integrated - they baked their own bread. Although there was evidence that some of the plant bakers were concerned about the growth of hot bread shops and the effect their sales were having and might have on the plant baker's market share, the hot bread shops were viewed as being in a niche market that did not compete directly with supermarkets in the sale of bread products. Most, if not all, of the Safeway stores that identified their relevant nominated competitors for bread products did not nominate a hot bread shop although there were hot bread shops in close geographic proximity to a number of the Safeway stores.
1060 In order to determine the extent of Safeway's power in the wholesale market for the acquisition of bread, it is not sufficient simply to look at the purchases made by Safeway from the three plant bakers. It is necessary to determine Safeway's market share by reference to the total volume of supply in the wholesale market. That market in Victoria included not only bread supplied by the three major plant bakers, but also the bread supplied by the independent plant bakers and in‑store bakeries. On this basis, Safeway's share of the wholesale market was reduced from the figure of 25% propounded by Professor Williams to something under 20%, around 16%.
1061 Professor Williams was of the view that Safeway had a substantial degree of market power because of the amount of bread it purchased from the three major plant bakers. But Tip Top, Buttercup and Sunicrust were not the only suppliers of bread in the wholesale market. There were other independent bakers. The existence of the independent bakers in the wholesale market is significant because, if taken into account in the wholesale market, the result is that a lower market share for Victoria was held by Safeway in 1994 and 1995. In 1995, Tip Top, Sunicrust and Buttercup sales accounted for 50.6% of total average weekly sales of bread products, independent plant bakers accounted for 9.2%, hot bread shops accounted for 31.6% and in‑store bakeries accounted for 8.5%. Further, in 1995, there was excess capacity in the bread manufacturing market (excluding hot bread shops) of which the independent bakers accounted for 17.5%.
1062 Professor Williams did not take into account independent bakers in determining the nature and extent of the wholesale market for the acquisition of bread products because of the product differentiation that existed in the market in relation to the various brands marketed by the plant bakers. But, as Professor Teece correctly observed, product differentiation does not mean that each plant baker was a market unto itself. The evidence was clear - there was an elastic demand for the various brands of bread (but inelastic as a whole) when analysed with respect to each brand. Variations in retail prices had a significant effect on sales of premium branded bread and a substantial proportion of the sales of particular brands of the three major plant bakers was sold when the brand was the subject of the regular cyclical promotional sale at a discounted price. There was a significant body of evidence which demonstrated that whenever a particular brand of bread, premium, secondary or price‑fighting was sold at a significant discount, its sales increased substantially and the sales of the brands not discounted suffered and were reduced.
1063 The existence of in‑store bakeries was not a constraint upon Safeway in the wholesale market. There were two types of in‑store bakeries. There were those that baked bread on the premises and those which did not have any production facilities. The in‑store bakeries that baked their own bread on the premises and which were called warm spots, had no need to acquire bread from the plant bakers. The in‑store bakeries with no production facilities, which were called cold spots, did not operate as a constraint as they were mostly contained in the supermarkets operated by Safeway, Coles and Franklins.
1064 The remaining area of potential purchase from plant bakers was what was called the route trade, which consisted of small retail outlets such as milk bars and convenience stores. The evidence was that the route trade, as a source of purchase from plant bakers, had been declining over the years, and the route trade was not itself an alternative purchaser from a plant baker who did not accept Safeway's terms of trade.
1065 It was submitted by Safeway that the existence of independent plant bakers other than Tip Top, Sunicrust and Buttercup in the wholesale market constrained the ability of Safeway to exercise its market power in the wholesale market in relation to the major plant bakers because the terms of trade that the Commission alleged Safeway sought to impose upon the plant bakers could not be achieved as the independent plant bakers were an alternative source of supply for such independent retail outlets. Those terms of trade were that the plant bakers should not supply cheap or discounted bread to independent stores who could then sell bread cheaply or at a discount by retail.
1066 However, it did not appear from the evidence that the independent plant bakers provided an alternative source of supply, without increased cost, to independent stores throughout Victoria. The independent bakers were not able to cover the wholesale market statewide as did the three major plant bakers. There was also evidence that the bread of some of the independent bakers was not of the same quality as that of the three major plant bakers and that independent bakers could not supply the volume of bread at the price sought by independent retailers. I am not, therefore, satisfied that the independent plant bakers were a viable source of supply for independent retailers who were seeking to acquire cheap bread to sell at a discount in the retail market.
1067 There was a fundamental disagreement between the Commission and Safeway as to the relevant type of potential entrant to the market to be considered in assessing the barriers to entry to the market in respect of which it is said Safeway had a substantial degree of market power. The Commission submitted that Safeway could not be constrained in the exercise of its market power, except by a new entrant of comparable size which would provide a viable alternative outlet for a plant baker's bread products if it decided not to deal with Safeway because it did not want to accept Safeway's terms of trade. Safeway submitted that having regard to the conduct pleaded, the relevant barrier to entry was the cost of setting up a retail store in competition with a Safeway store. Safeway contended that if a single Safeway store deleted a plant baker's bread products, the plant baker could easily find an alternative outlet or alternative outlets by looking for some local retail outlets to take additional stock.
1068 Safeway's submission failed to take into account the fact that its market power derived not just from its ability to delete products from an individual store but from its ability to negotiate statewide terms of trade, prices, discounts and rebates as a result of the overall purchases it was prepared to make on a statewide basis. If a plant baker was not prepared to accept any terms of trade required by Safeway it could only replace Safeway's purchases by going to a large number of individual retail outlets. The extent of the policy as formulated by Mr Brookes, demonstrated that Safeway's market power was derived from its ability to implement purchasing decisions statewide and not just by reference to the decisions to be taken by individual stores.
1069 As I have noted earlier, the extent of market share is not a necessary or definitive factor for the determination of market power. Professor Williams considered that Safeway's proportion of the wholesale market in 1995 for the acquisition of bread from the three major plant bakers, independent plant bakers and in‑store bakeries, which was of the order of 23%‑25%, taken together with the extent of the excess capacity that existed at that time, meant that retail stores were not a real alternative source of purchase for a plant baker if the plant baker did not like the terms of trade that Safeway was seeking to impose on it. The consequence was, it was said, that there was little constraint on Safeway's ability to negotiate lower or better terms of trade. According to Professor Williams there was a significant barrier to entry into the market for the wholesale acquisition of bread, having regard to the size of the new entrant which would be required to compete with Safeway on a statewide basis and that would have the opportunity to obtain trading terms comparable to that of an integrated grocery chain.
1070 Safeway complained that the barriers to entry relied upon by the Commission were not pleaded in the statement of claim. It is true that the nature of the barriers to entry relied upon by the Commission was not spelled out in the statement of claim in the terms in which the submission was made, that is, that Safeway could only be constrained by a new entrant of comparable size, but the issue and relevance of a barrier to entry of that type was recognised by Safeway's expert witnesses and the issue was canvassed fully in evidence‑in‑chief and in cross‑examination of all relevant expert witnesses.
1071 Professor Williams was of the view that the relevant barrier to entry to consider was that of a new entrant to the grocery level who could constrain Safeway's power as a buyer in the wholesale market. Professor Williams adopted the analysis of barriers to entry undertaken by the Trade Practices Tribunal in Re Queensland Independent Wholesalers Ltd (1995) 132 ALR 225 at 271‑272. In that case, the main barrier to entry was the size of operation required by a new entrant into the grocery distribution market. However, there was a recognition that there can be a threat of entry into the market by a number of firms of smaller size than Safeway which might constrain Safeway to act competitively. This issue was succinctly analysed by Professor Maureen Brunt in the following terms:
"The essential test for whether or not there is a significant barrier to entry can be expressed simply enough: it is whether the threat of entry of whatever kind will constrain incumbents to behave competitively. It follows that neither initial entry nor eventual established supply must necessarily be of the full‑line variety. Leading firms can be constrained by a collection of more specialized rivals. Firms may enter at one scale and one product‑range and grow to another."
Annual Proceedings of the Fordham Corporate Law Institute - International Antitrust Law & Policy, 1992, at 158.
1072 I am satisfied that Safeway's market power as an acquirer in the wholesale bread market could not be constrained, except by a new entrant of a size and store coverage comparable to that of Safeway. Any new entrant that could impinge upon or erode Safeway's market power would have to be able to set up a network of stores of significant size throughout Victoria.
1073 Safeway's market power in this wholesale market was derived from a number of sources and factors. It purchased significant proportions of the output of the three major plant bakers and was the largest individual purchaser of plant baked bread in Victoria. The evidence was not uniform but there was little dispute that around 1994 and 1995 Safeway was purchasing between 21% and 25% of the total of plant baked bread in Victoria. In particular, approximately 19.2% of Tip Top's production of bread products was supplied to Safeway, approximately 50% of Sunicrust's Melbourne metropolitan production of bread products was supplied to Safeway and approximately 17% of Buttercup's production of bread products was supplied to Safeway.
1074 Although the overall demand for bread at the retail level was price inelastic it was apparent that demand was elastic between different brands of bread. It was apparent that there was a significant lack of consumer loyalty to individual brands. The volume of sales of a particular plant baker's bread varied depending upon whether it was being sold on a cyclical or periodic promotion. As a result, Safeway was able to maintain its large volume of bread products although from time to time it reduced its purchases of a particular plant baker's products but at the same time increased its purchases of another plant baker's products.
1075 Safeway was therefore able to influence the terms on which bread products were supplied to it whilst at the same time maintaining the level of bread products it was offering for retail sale. An example of this ability is found in the co‑operative promotional allowances that Safeway sought and obtained from the plant bakers as part of the terms of trade negotiated for the purchase of bread products. These allowances were not unique to Safeway. Other retailers sought, and were given, promotional allowances by the plant bakers. It is not to the point that Safeway did not necessarily dictate to the plant bakers the terms and extent of the promotional allowances. The extent and level of promotional allowances was a matter for negotiation between the plant bakers and Safeway. However, more bread was sold on promotional sales than on non‑promotional sales. Although the size of the promotional allowance varied with each retailer, a promotion by Safeway was important for a plant baker because of the quantity of bread sold on promotion. According to Mr Linton, Buttercup's Victorian Manager, promotions by Safeway were especially important for the plant bakers as Safeway sold more bread on promotion than the other major retailers. Mr Cooper, from Buttercup, said that promotional sales represented a significant part of Buttercup's volume and that Safeway had the highest incremental increase in volume on promotional sales. Buttercup's profits improved when there was a substantial increase in volume during promotional activity.
1076 It was also an important factor in determining the existence and extent of Safeway's power in the market for the wholesale acquisition of bread that at relevant times each of the three plant bakers had significant excess capacity. A significant reduction in purchases by a buyer of the size of Safeway could not be replaced by sales to another similar organisation. Although there were other significant purchasers and buying groups who purchased bread products from the major plant bakers, the excess capacity still existed after their purchases were taken into account.
1077 Although there were numerous, indeed many, individual retail outlets to whom the plant bakers might turn if Safeway sought to influence the terms of trade adversely to the plant bakers' interests, the extent of market power Safeway possessed is to be measured not by reference to an individual transaction in relation to an individual store but by reference to the extent of its buying power overall.
1078 The Commission contended that it was an indication of Safeway's market power in the wholesale market for the acquisition of bread that it was seeking, by the use of that power, to raise the costs of its rivals in the retail market and thereby, prices in the retail market. There was an issue between the parties and their respective economist witnesses, first as to whether the theory of raising rivals' costs was a valid economic theory and, secondly, whether, in any event, the facts before the Court fitted the model. The economist witnesses called on behalf of Safeway (Professor Teece and Mr Richardson) argued that the Commission's case against Safeway was, in substance, that Safeway was seeking by the implementation of its policy to raise the costs of its competitors or rivals. Professor Teece regarded travelling along the road of the theory of raising rivals' costs as travelling across treacherous ground but was prepared to accept that the theory was available for application. However, he noted the observation in FM Scherer & David Ross Industrial Market Structure and Economic Performance, 3rd ed 1990, at 479 that "the broad concept [of raising rivals' costs] has not been tested or accepted by the U.S. courts."
1079 Professor Teece said that if either Safeway did not have monopsony power or if there was not an absence of an alternative supplier to the de‑listed suppliers upstream, then the factual basis for the theory was not established.
1080 I do not need to enter into a consideration of whether raising rivals' costs is a viable theory of anti‑competitive behaviour as s 46 does not require an effect on the relevant market or on competition to be demonstrated, rather it requires a demonstration of a proscribed purpose. The effect of the intended purpose or conduct is not a relevant line of inquiry. In any event, the Commission's case was not that Safeway had the power to raise rivals' costs but rather, that the purpose of its policy was to raise rivals' costs. As I have already found, that was not the purpose of the policy.
1081 It was put to Professor King that Safeway could not raise its rivals' costs unless it could be established that, because of its market power, it could cause each of the three major plant bakers plus independent bakers not to supply independent supermarkets with deals if it chose to do so. It was an integral part of Professor King's thesis that independent plant bakers were not a substitute for supply to the independent supermarkets. Professor King accepted that in order for Safeway to be in a position to raise its rivals' costs, there could be no sources of supply in the market equivalent to the three major plant bakers who refused supply to the independent supermarkets because of Safeway's exercise of market power.
1082 Professor Williams agreed with this approach when in response to the question:
"If one finds in this context that if Safeway attempted, through the exercise of market power, to increase its rivals' costs and if as a matter of fact it could not do so because of the existence of alternate sources of supply available to the rival, then you would have to take into account, would you not, in assessing Safeway's power, those alternate sources of supply?"
Professor Williams responded:
"Yes, I do think they are relevant".
1083 Professor King accepted that market power meant the ability of a purchaser to affect the terms of trade upon which it was supplied. He accepted that if Buttercup was prepared to supply bread to an independent store if Tip Top refused to do so because of the terms upon which Safeway was prepared to do business with Tip Top, or because Tip Top refused to accept those terms of trade from Safeway, then Safeway had limited market power. This was because Safeway could not affect the terms of trade in the market, although it was able to affect its own terms of trade with a particular supplier. Put shortly, Safeway had a degree of market power in the sense that it could affect its own terms of trade but it did not have sufficient market power to influence the terms of trade throughout the whole market, nor was it able to raise its rivals' costs. Professor King accepted that if a plant baker, such as Buttercup, was still prepared to supply an independent store at a cheap price even though Safeway might delete its products from a particular store, then it would not have sufficient market power to raise its rivals' costs.
1084 It is important in this context to remember that Buttercup was always an alternative source of supply to the other plant bakers for the independent stores. It was not prepared to go along with Safeway's policy. It was only Tip Top which responded to Safeway's actions by withdrawing the supply of bread at a discount. Mr Linton, Buttercup's General Manager for Victoria, said that his attitude was that if Buttercup products were deleted by a customer, that was a commercial reality and it would find another customer. Mr Cooper, from Buttercup, held the view that the policy of Safeway would ultimately be ineffective and his attitude was that a deletion of Buttercup products by Safeway would not cause Buttercup much harm because the market would work itself out.
1085 The economist witnesses were in agreement that a traditional method of determining whether an organisation had market power as a purchaser, that is to say monopsony power, was to determine whether it had the ability to reduce prices (and output) below competitive levels. Whether this power existed was answered by asking the question whether the organisation could engage in a small but significant non‑transitory decrease in price (called an SSNP). This was not the only approach to the determination of market power as it was accepted by the economists that market power was also determined by the ability of an organisation to affect the terms of trade in the market.
1086 Safeway's economist witnesses were critical of the Commission's economist witnesses seizing on the extent of Safeway's purchases from the three major plant bakers and the ability of Safeway to negotiate favourable terms of trade from those plant bakers as an indicator of the extent and substantial nature of its market power. It was said that the Commission's economists' approach was confused or mistook buying power for market power.
1087 It is important in determining the extent of market power to distinguish market power from buying power. A particular purchaser may be able to exert buying power in relation to a particular supplier and thereby obtain favourable terms of trade but the extent of that buying power says nothing about the power of the purchaser in the overall market. Market power is not derived from size, rather, it is derived from market share taken in conjunction with a consideration of barriers to entry. Although there may be a significant barrier to entry for a purchaser to enter the market for the wholesale acquisition of bread or groceries on the scale of Safeway, a situation may arise where a number of new buyers might enter the market if the market price was reduced below competitive levels.
1088 It is true that monopsony power may be defined as the ability of a purchaser to obtain a market price lower than would otherwise be obtained in a competitive market, or to obtain more favourable terms of trade in the market than they would otherwise obtain in a competitive market. But it is not an answer to a claim that Safeway had a substantial degree of market power in the wholesale market for the acquisition of bread to say that it was only able to exercise that power over 85% of the market, namely over the three major plant bakers. Section 46 does not require a contravener to have monopolistic or monopsonistic power; it is sufficient that the contravener have something less than control of the market, so long as the market power exercisable is substantial. The concept of a substantial degree of market power identifies a relative concept, that is to say, not total market power but something less than total market power, an amount of power that is considerable or large. Thus, it was not to the point that Safeway did not have the ability to force down the wholesale price of bread or the ability to raise the costs of the supply of bread to its retail competitors.
1089 Whether Safeway had substantial market power in the present case depended on the extent to which Safeway was constrained by barriers to entry and by the ability of the three major plant bakers to resist the terms of trade sought to be imposed by Safeway. They would be able to do so if they had alternative purchasers to whom they could supply the bread deleted by Safeway or if the competing retail store could obtain cheap or discounted bread from an alternative bread manufacturer.
1090 It was not suggested by the Commission that Safeway had the ability to affect the terms of trade on which, or the price at which, Tip Top, Sunicrust or Buttercup supplied bread to Coles or to Franklins. The Commission did not submit that Safeway's market power in the wholesale market for the acquisition of bread was absolute. It did not have to go so far, nor did it contend that Safeway had the ability to raise prices generally above competitive levels in the retail market.
1091 Rather, the Commission's case was that Safeway had a sufficient degree of market power, which was substantial enough to influence the terms of trade on which Tip Top, Sunicrust and Buttercup dealt with independent retailers in the wholesale market as acquirers of bread, by imposing a term of trade on the plant bakers restricting the supply of cheap bread to those independent retailers.
1092 As I have observed earlier, the issue is whether Safeway had sufficient market power to influence the terms of trade on which the plant bakers dealt with it to an extent which it could not do in a competitive environment. This view is consistent with the policy that lies behind s 46 in its present form which was introduced into the Act in 1986. The element of a corporation having a substantial degree of power in a market was introduced in substitution for the element of a corporation being in a position substantially to control a market. It is apparent that the amendment introduced a lower threshold of market power in order for the section to have operation. This was made clear in the second reading speech in relation to the Bill that introduced the amendment, where the Attorney‑General said:
"The test for the application of the section is to be reduced from that of a corporation being in a position substantially to control a market to a test of whether a corporation has a substantial degree of market power. As well as monopolists, section 46 will now apply to major participants in an oligopolistic market and in some cases, to a leading firm in a less concentrated market." (Emphasis added)
1093 Safeway submitted that there was no evidence that it was able to obtain persistently better buying terms than independent supermarkets. The evidence was insufficient to enable me to reach that conclusion but that does not mean that Safeway did not have a substantial degree of market power by reference to the structure of the market, the barriers to entry to the market, the excess capacity in the plant bakers and the lack of brand loyalty to the plant bakers' premium branded proprietary bread. It must not be forgotten that Safeway's terms of trade with the plant bakers included a term that Safeway bought at the best price being offered in the market place. Mr Jones gave an example of how this worked in practice when he referred to occasions when Coles would run a promotion that was cheaper than a Safeway promotion. On those occasions he would telephone the plant bakers and they would upgrade the terms given to Safeway or say they were going to upgrade the deal.
1094 It is important to recognise that it was no part of the Commission's case to submit that Safeway either sought or had the market power to raise the price of bread in the retail market above competitive levels. It was clear from the evidence that Safeway could not do so, having regard to the level of competition in the retail market from the other chains such as Coles and Franklins, independent stores, hot bread shops and in‑store bakeries.
1095 Focusing on the extent of competition at the retail level has the potential to confuse the purpose for which Safeway took advantage of its market power with the identification of the market in respect of which it possessed a substantial degree of market power. The allegation was that Safeway exercised its substantial power in the wholesale market for the purpose of preventing or deterring competitive conduct, first, in the retail market by independent stores, and secondly, in the wholesale market by the three major plant bakers in relation to the terms of trade on which they dealt with independent stores. Whether Safeway had the ability to achieve its purpose in the retail market is not to the point. Rather, the point for the purpose of considering a contravention of s 46 is to answer the question whether Safeway had the proscribed purpose without considering whether it was able to achieve that purpose.
1096 The only relevance of the fact that Safeway may not have had any power in the retail market which enabled it to raise the price of bread above competitive levels is whether that absence of power translated into an absence of power at the wholesale level as an acquirer of bread, or whether it otherwise impinged upon, and neutralised, any such power it otherwise might have had at the wholesale level.
1097 The Commission submitted that evidence of the existence and exercise of Safeway's substantial market power in the wholesale market for the acquisition of bread was to be found in the following circumstances:
· Safeway obtained from each of the three plant bakers trading terms which were at least as good as the trading terms given to any other purchaser. Safeway's trading terms contained a provision that it would always buy at the best price.
· Safeway required the plant bakers to introduce a second delivery of bread each day to its stores.
· Safeway required the plant bakers not only to deliver the bread into the stores but to stack it on the bread racks.
· Safeway required the plant bakers to contribute substantial sums for promotional expenses. The amount of these expenses increased throughout 1994 and 1995. The promotional expenses were a considerable contributor to Safeway's gross profit in the bread category. The significance of the promotional contributions was demonstrated by the fact that during 1994 and 1995, 86%‑87% of total bread sales was derived from sales on promotion.
· The fact of the formulation and implementation of the policy which was intended to influence the terms upon which suppliers to Safeway dealt with other buyers of their products.
1098 Safeway criticised these indicia of market power on the basis that, rather than being indicators of market power, they were indicators that Safeway was able to negotiate favourable terms from individual plant bakers and that such ability was not the equivalent of market power. It may well be that such indicia do not demonstrate control of the market or monopsonistic power, but they are indicators of a degree of market power having regard to Safeway's size and the extent of its relevant market share which, of course, by itself, does not indicate market power.
1099 Identifying indicia of market power is not the end of the issue as it is necessary also to determine whether there were any significant constraints on Safeway's ability to exercise the extent of the market power it possessed in the wholesale market for the acquisition of bread products.
1100 There was no constraint at the wholesale level because of the existence of other wholesale acquirers of bread such as Coles, Franklins and other wholesale organisations associated with banner stores. Tip Top, Sunicrust and Buttercup, at the relevant times, had significant excess capacity, and thus the other wholesaler acquirers were purchasing all the bread they needed. The plant bakers, if deleted by Safeway, could not find a substitute purchaser for the deleted product. The consequences of the excess capacity was exacerbated by the low level of brand loyalty between premium brands of the plant bakers. Although Safeway placed significant emphasis on the existence and activities of hot bread shops, they were not significant purchasers of bread in the wholesale bread market. There was no doubt that they had substantial sales at the retail level in 1994 and 1995 but they manufactured that bread themselves. They also suffered from excess capacity. Hot bread shops were not therefore, in 1994 and 1995, an alternative source to be supplied by the plant bakers.
1101 For these reasons, I am satisfied that at the relevant times Safeway had a substantial degree of market power as an acquirer of bread by wholesale from bread manufacturers in Victoria. Whether it has taken advantage of that market power for a proscribed purpose involves an investigation of two matters, first, whether Safeway has acted in a particular way, that is, taken advantage of its market power and, secondly, whether a proscribed purpose for so acting was made out.
1102 The Commission submitted that, applying Queensland Wire, the expression "take advantage" meant no more than "use' and that if a corporation did something which it could not do if it did not have substantial market power, then it had taken advantage of that power. The Commission submitted that Safeway could not have undertaken the conduct complained of in a market where it was forced to act competitively and that it could not have used its buying power to induce, or attempt to induce, the plant bakers to alter the terms on which they dealt with the independent stores. It was said that in the absence of its market power Safeway would have been a price taker (that is, it accepted the prices offered by the plant bakers) and would not have been able to impose terms of trade on the plant bakers and implement its policy.
1103 In Melway, the majority observed (at 260):
"Although there are two aspects of that prohibition [in s 46], they are inter‑related. The practical significance of that relationship may vary according to the circumstances of particular cases, or classes of case."
Although it may be appropriate, and in a given case easy, to infer purpose from conduct (allowed by s 46(7)), it is not necessarily appropriate, nor is it so easy, to infer from a finding of purpose that a firm has taken advantage of its substantial degree of market power to achieve that purpose: Telecom Corporation of New Zealand Ltd v Clear Communications Ltd [1995] 1 NZLR 385 at 402; Melway (supra) at 262.
1104 Melway did not disturb the principle in Queensland Wire (supra) that the expression "take advantage of" meant "use" and did not require proof of predatory or morally blameworthy conduct: Melway at 260. But what Melway did develop out of Queensland Wire was the manner in which such "use" was to be established. The majority said at 264:
"The focal point of debate was whether, even accepting the purpose for which it was found to have been done, Melway's refusal to supply the respondent was a taking advantage of that power for the proscribed purpose. Consistently with the approach of the court in Queensland Wire, much of the argument was directed to a consideration of how Melway would have been likely to behave, if it had lacked the power it had. Section 46 of the Act requires, not merely the co‑existence of market power, conduct, and proscribed purpose, but a connection such that the firm whose conduct is in question can be said to be taking advantage of its power."
A majority of the High Court in Queensland Wire, in answering the question whether BHP had taken advantage of its market power, asked how BHP would have been likely to behave in a competitive market and compared the answer with how it behaved in the circumstances under consideration. The majority of the High Court in Melway was concerned to define precisely what was the nature of the competitive situation to be compared. The trial judge and the majority of the Full Court in Melway had asked whether in a competitive environment Melway, without its market power, would have been compelled in a practical sense to supply Auto Fashions Australia. The majority of the High Court in Melway did not agree that that was the correct question to ask, but rather asked the question whether Melway's wholesale distributor system, which involved restriction of competition at the wholesale level, amounted to Melway taking advantage of its market power. The majority said at 267:
"The most likely explanation of the assumption that, in a competitive market, a refusal of the respondent's application for supply would be a loss of 30,000‑50,000 sales to Melway is that it was thought that s 46 required that assumption. But the hypothesis that Melway lacks a substantial degree of power in the market does not require the assumption that the distribution arrangements or practices of Melway and its competitors are such that they are all commercially obliged to supply anyone who seeks to become a wholesaler, or that, at the wholesale level in the market, there exists a state of perfect competition, or that a decision to confine supply to one or a small number of wholesalers will result in a loss of sales. The only purpose of the hypothesis is to seek to test whether Melway has taken advantage of its degree of market power. It is one thing to compare what it has done with what it might be thought it would do if it lacked that power. It is a different thing to compare what it has done with what it would do in circumstances that are completely divorced from the reality of the market."
The last two sentences in this passage are significant as they emphasise the importance of the characterisation of the competitive situation to be compared and the assumptions to be built into it.
1105 The majority in Melway noted that the trial judge and the majority of the Full Court in Melway had not addressed what they called 'the real question", which was whether Melway, without its market power, "could have maintained its distributorship system, or at least that part of it that gave distributors exclusive rights in relation to specified segments of the retail market" (268). The majority of the High Court in Melway preferred the reasoning of Heerey J, who dissented in the Full Court. The majority said at 268:
"…He observed that Melway had adopted its segmented distribution system before it secured its position of market dominance, and there was no reason to believe that it would not be both willing and able to continue that system in a competitive market. He pointed out that, in refusing to supply the respondent, Melway was not denying itself sales, and there was no justification for assuming that in a competitive market it would be denying itself sales."
1106 The majority in Melway rejected the respondent's argument that where the alleged taking advantage of market power was a refusal to supply, it was not necessary or relevant in determining whether the organisation had taken advantage of its market power, to establish whether it would or would not have refused supply if it lacked market power. The argument embraced the proposition that as Melway had a substantial degree of market power, it necessarily took advantage of that power when it refused supply and that what Melway may or may not have done in a competitive environment was not to the point. The majority rejected this argument as being contrary to the reasoning of the majority of the High Court in Queensland Wire and because it equated the exercise of market power with deciding whether to grant or withhold supply. The majority said at 269:
"Freedom from competitive constraint might make it possible, or easier, to refuse supply and, if it does, refusal to supply would constitute taking advantage of market power. But it does not follow that because a firm in fact enjoys freedom from competitive constraint, and in fact refuses to supply a particular person, there is a relevant connection between the freedom and the refusal. Presence of competitive constraint might be compatible with a similar refusal, especially if it is done to secure business advantages which would exist in a competitive environment."
1107 I have analysed Melway in some detail because it is important to understand what is said to be the conduct of Safeway which constituted the taking advantage of its substantial degree of power in the market. In this context it is important to bear in mind that the allegation is not only that Safeway contravened s 46 by taking advantage of its substantial degree of market power in the wholesale market for the acquisition of bread for the alleged purpose, but is also made in the alternative that Safeway attempted to take such advantage.
1108 The conduct which the Commission alleged constituted the use of Safeway's market power or the acts of taking advantage were the facts and circumstances underlying each of the ten incidents (including Preston Market) which the Commission submitted resulted in:
· Price collusion between Safeway and Tip Top (only in relation to the Preston Market incident);
· Safeway inducing or attempting to induce each of the three plant bakers to engage in the practice of resale price maintenance;
· Safeway engaging or attempting to engage in the practice of exclusive dealing;
· Safeway making or attempting to make contracts or arrangements, or entering into, or attempting to enter, into understandings that had the purpose of preventing or lessening competition in the specified markets or giving effect, or attempting to give effect, to such contracts, arrangements or understandings;
· Safeway implementing the policy alleged by the Commission.
1109 The conduct that was based upon Safeway implementing the policy alleged by the Commission was also put by the Commission on an alternative basis if there was a finding that Safeway asked for a case deal before deleting a plant baker's bread from any of its stores. It was alleged by the Commission that if Safeway did ask for such a case deal, it did so knowing that the plant bakers would not agree because, as Safeway knew, the sale of proprietary branded bread at prices competitive with generic or secondary branded bread would damage or destroy the goodwill or value attached to the brands of the proprietary branded bread.
1110 The conduct alleged by the Commission may be comprehensively described as: Safeway imposing a term of trade on the three plant bakers to the effect that if they sold cheap bread to independent stores who retailed it at a price less than the price charged by Safeway for its bread at a store in the vicinity of the independent store, Safeway would delete the respective plant baker's products from the Safeway store whose bread sales were affected by the sale of the cheap bread and the deletion would stay in place until the independent store ceased selling the bread supplied by the plant baker at a cheap price.
1111 I have already found that the allegations of price collusion, inducing or attempting to induce resale price maintenance by the plant bakers, engaging or attempting to engage in exclusive dealing, making or entering into, or attempting to make or enter into contracts, arrangements or understandings which had the purpose of preventing or lessening competition and of the making of the policy, as alleged by the Commission and as alleged in its alternative formulation, have not been made out. Accordingly it follows that Safeway has not taken advantage of its market power in the manner alleged by the Commission for the purposes of s 46(1)(c) of the Act. Put shortly, the conduct relied upon by the Commission as constituting the acts involved as the "taking" advantage of market power for the purposes of s 46(1)(c) of the Act has not been made out.
1112 But it is still necessary to consider whether Safeway has taken advantage of its market power having regard to the factual findings I have made as to what occurred in each of the nine incidents involving independent stores. Although contraventions of s 46(1)(c) have not been made out having regard to my findings as to what occurred in each of those nine incidents, it is still necessary to determine whether contraventions of s 46(1)(a) have occurred as such contraventions are open, on the basis of those findings, if I am satisfied that Safeway has taken advantage of its market power and has done so for the purpose of substantially damaging the independent stores.
1113 For the reasons to which I shall refer, I do not consider that Safeway has taken advantage of its market power in the wholesale market for the acquisition of bread in the sense in which the expression "take advantage" has been construed in Queensland Wire and explained in Melway. Although Safeway has "used" its market power in the sense that it has engaged in conduct that is available to it there is no necessary connection between its market power and the conduct in which it has engaged with the plant bakers.
1114 If the question is asked whether Safeway in a competitive environment in the wholesale market without its market power could have acted as it did and have a policy of deletion, it is necessary before answering the question to make assumptions as to the nature of the competitive environment. To repeat the observation of the majority of the High Court in Melway at 267:
"It is one thing to compare what it has done with what it might be thought it would do if it lacked that power. It is a different thing to compare what it has done with what it would do in circumstances that are completely divorced from the reality of the market."
If Safeway were in a competitive environment in the wholesale market then it would be constrained by its competitors in relation to the terms of trade it could impose on its suppliers. But would it act any differently than it would if it had its market power?
1115 If I assume for the moment that the term of trade alleged by the Commission has been made out and that the policy for which the Commission contended existed, I would still not reach the conclusion that, by imposing that term of trade and saying to the plant bakers - if you sell or continue to sell cheap bread to a competitive independent store, Safeway will not stock your products until the independent store ceases selling its discounted bread below Safeway's prices - Safeway was taking advantage of its market power. Consistently with the approach of the majority in Melway, I should consider what Safeway might have done if it did not possess its market power.
1116 I reach a similar conclusion if I proceed on the alternative basis that either Safeway said to a plant baker: Safeway is deleting your bread because you have sold, or are selling, cheap bread to a competitive independent store, or that Safeway said to a plant baker: if you do not give me the same cost price on the branded bread you sell Safeway as you are giving to a competitive independent store on secondary branded or generic bread, Safeway will delete your bread from its store while that store buys its bread for that price. Again, consistently with the approach of the majority in Melway, I should consider what Safeway might have done if it did not possess its market power.
1117 In Queensland Wire, it was concluded that in a competitive environment BHP would not have offered, in a commercial sense, to withhold supply of Y‑bar to Queensland Wire, because one of its competitors would have obtained the business and presumably made a profit denied to BHP. There is no analogous conclusion to be reached in the present case.
1118 The reality of a competitive wholesale market in which Safeway did not have substantial market power would be that Safeway would still have alternative sources of supply available if a plant baker refused to stop selling bread to an independent store and Safeway stopped buying that plant baker's bread. The other plant bakers, who were not supplying the particular independent store with cheap bread would no doubt be willing to supply the particular Safeway store with bread, or with increased quantities if they already supplied it with bread. In particular, Safeway would have access to the supply of the Sunicrust and Buttercup price‑fighting brands. Safeway would still have the same number of retail outlets and there is no reason to assume that it would not receive the same tenders as it did from Sunicrust and Buttercup. If it sought to impose the same term of trade and policy upon the plant bakers and the plant bakers resisted, it would still delete the plant bakers' products and bring in a price‑fighting brand. In such circumstances, it would not act any differently, as it would not, unlike BHP in Queensland Wire, be faced with a competitive situation in which it would be expected, according to accepted principles of commercial practice and reality, to act differently from the way it acted in circumstances where it possessed a substantial degree of market power in the wholesale market.
1119 In a competitive situation Safeway might still try to impose its terms of trade and policy upon the plant bakers. If it failed, as it did in a number of the incidents under consideration, would it forget about the deletion and abandon the idea of bringing in the bread of other plant bakers or the Sunicrust or Buttercup price‑fighting brands? I consider the answer to be in the negative. It would act in exactly the same way as it did in the situation where it possessed market power. It would not (unlike BHP in Queensland Wire) be faced with any commercial imperative different from that which it faced whilst possessing a substantial degree of market power in the wholesale market.
1120 The Commission submitted that Safeway could not, in a competitive market, have used its buying power to induce, or attempt to induce, the plant bakers to alter the terms on which they dealt with the independent stores. That may be so in the sense that it could not have achieved the result it set out to achieve. But I do not consider that it is the appropriate question to ask. Rather, the appropriate question to ask is whether, in a competitive environment, where it did not have a substantial degree of market power, it would have acted differently. I have answered that question in the negative. The issue is not whether, in a competitive environment, Safeway could have imposed on the plant bakers a requirement that they stop selling bread to an independent store, or increase their selling price to an independent store, or that they supply Safeway proprietary premium bread at the same cost price, but rather, whether Safeway would have deleted a plant baker's bread from one of its stores when it could not achieve the result of the plant baker stopping selling bread to an independent store or increasing its selling price to that independent store or of obtaining the same cost price for proprietary premium bread. There was no commercial imperative to act in a way different than it would have acted where it possessed a substantial degree of market power.
1121 The conclusion that Safeway did not "take advantage" of its substantial market power can be reached by another approach. In this context it is important to keep a consideration of whether Safeway has engaged in conduct that may be said to be taking advantage of its substantial market power separate from a consideration of the purpose for which it has taken such advantage. This other approach focuses substantially on the allegations of the Commission which rely upon contraventions of ss 45, 47 and 48 of the Act and implementation of the policy alleged by the Commission. A contravention of those sections can occur whether or not a corporation has a substantial degree of market power. Market power is not required in order for contraventions of those sections to be established. Similarly, implementation of the policy of deleting products can be achieved by any supplier or wholesaler who cannot get its customer to agree to his terms, particularly where alternative products are available for purchase.
1122 The findings I have made, and the analysis I have undertaken, results in the conclusion that Safeway has not contravened, or attempted to contravene, s 46 of the Act in relation to any of the incidents in respect of which a contravention of s 46 was alleged.