ACCC proposes to deny authorisation to plant breeders group

The Australian Competition and Consumer Commission today issued a draft decision proposing to deny authorisation to arrangements proposed by the Australian Nurserymen's Fruit Improvement Company Ltd.

ANFIC is a company comprised of 12 members who are each operators of commercial plant nurseries. These nurseries supply plant material to fruit growers for commercial production.

ANFIC has proposed to establish a strategic alliance between its 12 members and various participants in the supply chain, including growers and wholesalers, to undertake joint marketing and production of high quality fruit varieties referred to as exceptional fruit by ANFIC.

Essentially, the arrangement would allow ANFIC's members to standardise their royalty collections and coordinate the supply of nominated fruit varieties. ANFIC's members would also have the ability to restrict the supply of the nominated exceptional fruit varieties provided to retailers and ultimately consumers.

The ACCC considers that intellectual property protection is important for the development and future competitiveness of the Australian fruit industry. However, in conducting its assessment the ACCC has concluded that the arrangements proposed by ANFIC are unlikely to provide benefits that would exceed those available under the current intellectual property regime.

While the ACCC has concluded that ANFIC's proposal is unlikely to result in additional benefits to the public, this conclusion has been reached after considering the information available to it. Importantly, the ACCC recognises that supply chain arrangements can provide for improvements in intellectual property protection and in the promotion of appropriate investment incentives, thereby providing benefits to the public. However, it is the role of the applicant to satisfy the ACCC, through the demonstration of public benefits, that the proposed arrangements should be authorised.

Moreover, the ACCC is concerned from a competition perspective that these arrangements, if given effect to, may result in less efficient outcomes for society, for example, less choice and higher prices.

The ACCC is currently seeking submissions from interested parties in relation to its draft determination in this matter, submissions can be made to: The General Manager, Adjudication Branch, Australian Competition and Consumer Commission, PO Box 1199, DICKSON, ACT, 2602. Submissions can also be lodged by email to adjudication@accc.gov.au or facsimile to (02) 6243 1211.

Copies of the draft determination are available on the ACCC's website.

Background

*The ACCC has the function, through the authorisation process, of adjudicating on certain anti-competitive practices that would otherwise breach the Trade Practices Act 1974. Authorisation provides immunity from court action, and is granted where the ACCC is satisfied that the practice delivers a net public benefit. In considering a request for authorisation the ACCC conducts a comprehensive public consultation process.