ACCC authorises North Queensland sugar agreements

The Australian Competition and Consumer Commission has today granted authorisation* to collective supply and expansion agreements between sugar cane growers in North Queensland and CSR.

"The authorisation enables sugar cane growers and CSR to give effect to collectively negotiated terms and conditions of cane supply to the CSR-owned Pioneer and Invicta Mills in the Burdekin region", ACCC Chairman, Professor Allan Fels, said today.

"The Queensland sugar industry remains highly regulated with State legislation providing for, among other things, the making of collective cane supply agreements, including cane payment arrangements, and exempting much of the conduct for which authorisation is sought. However, the application was lodged by CSR in order to obtain the certainty provided by an ACCC authorisation."

The ACCC was satisfied that the agreements would deliver public benefits in the form of increased mill throughput and farm output, associated new investment, and efficiency gains from the improved use of infrastructure. Related public benefits identified included export growth and increased international competitiveness, and associated economic gains to the Burdekin cane growing region.

In agreeing to the authorisation, the ACCC had to weigh up the likely detriment from the authorised arrangements against the situation without the arrangements but with considerable restrictive legislation in place. In that context, the ACCC considered the anti-competitive detriment arising from the agreements to be minimal and was outweighed by the benefits to the public.

The ACCC has authorised, with conditions, the giving effect to the agreements for five years.

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. Authorisation provides immunity from court action, and is granted where the ACCC is satisfied that the practice delivers offsetting public benefits. Applications for authorisation are considered on a case by case basis. The onus is on the applicant to demonstrate that there is a public benefit arising from the conduct and that the public benefit outweighs any public detriment. In order to identify and measure the public benefits and detriments associated with the conduct, the ACCC compares the position which would, or would be likely to exist in the future if authorisation were granted, with the position if the authorisation were not granted. Authorisation, once granted, does not compel parties to participate in the proposed arrangements.