I saw this note on a website and was pretty amazed ... this Australian company has won numerous awards (so they say) ...

"We accept editorial submissions to all our magazines, provided the material relates to the interests of our readers and is pertinent to the particular magazine. We do give preference to advertiser's copy and please be aware that where we publish magazines on behalf of other organisations, it is the organisation that has final editorial control."

Is giving preferential treatment to advertisers' press releases acceptable in your country? If so, do you make this clear to your readers?

I wish I could say I was surprised...but I've seen more of this sort of unethical stuff in the past few weeks than I've seen in the past few years.
Something is happening in B2B. And it ain't good.
Even the well-established rules of ethics seem to be falling away.

Like just about everything else, different areas of the world have different editorial ethical standards. This statement seems more like something from a custom publishing magazine, than a reader-focused one. In Europe I've been told about and been offered some pretty desirable "perks," which is considered part of the compensation for a job that doesn't pay particularly well.

I publish magazines in Africa and the Middle East and have no problem with this editorial stance. The publishers are up-front with their desire to provide editorial priority to their advertisers. They post their policy on their website and everyone - both readers and advertisers - understand their poloicy in advance. The real issue to be addressed is with publications who assert their editorial independence on a public platform but still implement a 'hidden' internal policy to prioritise contributions from advertisers. At least this publishing company is honest about their content and editorial policies - nothing unethical here.

Unfortunately with trades, the advertisers really do float a good portion of the business so you have to be somewhat accomodating, a reason why traditional newspaper journies so often look down their noses at us. But on the other hand, I look at it this way (and my experiences prove it): as long as my reporting and that of my writers is fair, accurate and multi-dimensional then no one really has a basis to complain to me or my publisher. While still being forced to play the advertising game, my publication has built quite a reputation in not being lackeys for the vendor companies ... quite frankly we often piss them off for one reason or another. Usually it's because we didn't allow their pr person to spin an article in the way they wanted, or we're scapegoated for the reason that the company failed to do something they were supposed to do. And because of our ethics and the quality of our product, they don't stay mad or mad enough to pull advertising because they realize they need us just as much if not more than we need them. There have been an isolated case or two where an advertiser has left us for more than the reason of budget, but that has often been because of a personality clash with my publisher. For anyone who assumes there is a plethora of individual maturity in the business world, I have a bridge in Brooklyn I'd like to sell ya.

Unfortunately, in B2B publishing, especially in today's ad-stressed environment, many publications are catering - at least a little - to advertisers.
My publication relies on vendor-contributed articles for content and my job is to make those articles read as useful, information, non-marketing copy. for the most part, we are successful. We accept articles from both advertisers and non-advertisers, with the ration about 40-60 in favor of non-advertisers. However, we do give our advertisers a break in accepting their articles - if they meet our criteria. If not, we work with them to make the articles acceptable.
I have found, though, that our advertisers generally understand what is needed far better than non-advertisers. Advertiser-provided articles tend to be more appropriate and useful than those from non-advertisers. Maybe it's because they understand our audience better, or because they understand (through my constant reminding) why good editorial is better than marketing hype. Or maybe they understand that we will cut out copy that is inappropriate.
Are we crossing the ad-edit line? Probably. Is it necessary for survival. Yes. We have an editorial staff of two and no free-lance budget.