ACCC proposes to allow independent retailers of office products to collectively bargain with suppliers
The Australian Competition and Consumer Commission has issued a draft decision proposing to authorise* Office Choice Limited, Office National Limited and Office Products Depot Limited, together the Office Group, to collectively bargain the terms and conditions on which wholesale suppliers of stationery and office products will supply them and their franchisees.
Office Choice and Office National are franchisors of chains of independently owned franchises selling retail office supplies across Australia. Office Products Depot runs a similar franchise business in New Zealand, sourcing some of their stock from Australian suppliers.
"The ACCC considers that allowing the Office Group to negotiate the terms and conditions of the supply of office products through a single process, will enable wholesalers to provide them with products at a lower cost than they might otherwise be able," ACCC Chairman, Mr Graeme Samuel, said today.
The ACCC also considers that collective bargaining arrangements will result in transaction cost savings for the Office Group and wholesalers.
"The ACCC believes that the possible anti-competitive effect of the collective bargaining arrangement is limited by the voluntary nature of the arrangement, the comparative size of the bargaining group and competition for office products at the wholesale and retail levels.
"Allowing the Office Group to collectively bargain does not reduce the ability of members to negotiate individual agreements with suppliers outside of the collective arrangement.
"The ACCC has also granted interim authorisation to allow collective bargaining to commence between the Office Group and their suppliers for the 2008-09 supply year.
"The ACCC has issued this draft determination and granted interim authorisation less than one month after receiving the Office Group's application for authorisation. This outcome demonstrates the ACCC's continued commitment to deal expeditiously with collective bargaining matters.
The ACCC is seeking submissions from interested parties in relation to its draft determination in this matter. Copies of the draft determination will be available on the ACCC's website. Submissions can be made to: The General Manager, Adjudication Branch, Australian Competition and Consumer Commission, PO Box 3131, Canberra, ACT 2601. Submissions can also be lodged by email to adjudication@accc.gov.au.
*Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment. The ACCC conducts a comprehensive public consultation process and issues a draft determination before making a decision to grant or deny authorisation.
