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In 2019, the Queensland Government commissioned an Inquiry into the production of bananas in Queensland (the Banana Inquiry). At the time, there were 20 main

In 2019, the Queensland Government commissioned an Inquiry into the production of bananas in Queensland (the Banana Inquiry). At the time, there were 20 main producers of bananas in Queensland. The producers had requested an inquiry as profits in the sector were continuing to decline and many felt the industry was in crisis. The Inquiry revealed that there was an oversupply of bananas and that the optimal number of banana producers would be 8. The Report recommended that the banana producers who were planning to stay in the sector should 'compensate' those that opted (or were asked) to leave.

In early 2020, the Queensland Department of Agriculture established a taskforce to consider the recommendations of the Inquiry. The taskforce approved of the findings that, to return to profitability, the number of producers needed to be reduced to 8.

In September 2020, with these recommendations in mind, the 20 main banana producers formed the Banana Industry Development Society (BIDS). BIDS prepared a rationalisation plan which would achieve a reduction in capacity of 20%. To achieve this objective, agreements would be concluded between the producers who would 'stay' in the market and those who would 'leave' the market. At the end of September 2020, BIDS informally submitted these measures to the Department of Agriculture and asked if the Department had any objection. The Department replied saying it had no objection.

On this basis, BIDS prepared a standard form contract which included the following key provisions:

Those staying in the industry (imaginatively named the 'Stayers') would compensate those leaving the industry (the 'Leavers'). The amount of compensation would be based on a fixed rate of $10 per kg of bananas produced in the preceding financial year by the Leaver.

The Leavers would only be permitted to sell their banana plantations to a Stayer or, in the alternative, undertake not to use the land for the purposes of banana growing for a period of 5 years.

The Leavers also agreed not to compete with the Stayers for a period of 2 years.

To further reduce capacity, the Stayers agreed that they would remove at least 10% of their own banana production from supply in 2021. This would be achieved by discarding 10% of their production in a way that would ensure that this portion of production did not indirectly reach the market.

To further improve profits in the banana industry, during its meeting in October 2020, BIDS made a recommendation that members should increase the price of bananas by 10%. BIDS announced this recommendation on its website.

One of the Leavers has come to you for advice. It is dissatisfied with the amount of compensation that it was paid (claiming that it had not had time to read the standard form contract) and claims that BIDS should not have been allowed to impose a 10% price increase.

Provide advice to the Leaver in relation to any actions that might be available under the Competition and Consumer Act (including the ACL). **Provide references to section of law***

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