Collective contract negotiations working well for Premium's dairy farmer members

The Australian Competition and Consumer Commission has made a draft decision to re-authorise collective negotiation arrangements proposed by Premium Milk Ltd on behalf of its dairy farmer members.

The proposed arrangement allows present and future Premium members in south east Queensland and northern New South Wales to collectively negotiate farm gate milk prices and milk standards with Parmalat Australia Ltd.

"The ACCC considers that the collective bargaining arrangements are likely to continue to be of benefit particularly through providing the opportunity for increased dairy farmer input into contracts," ACCC chairman Graeme Samuel said.

Participation in the collective negotiations is voluntary for both Premium's dairy farmer members and Parmalat.  The authorisation does not extend to a collective decision by dairy farmers to boycott Parmalat if it refused to participate in collective negotiation or for other reasons including a failure to reach a collective agreement.

Premium's members have been collectively negotiating contracts with Parmalat under an ACCC authorisation, and with Parmalat's support, since 2001. The ACCC proposes to re-authorise the arrangements for a further ten years.

The ACCC's draft determination will be available from the ACCC website. The ACCC invites submission from interested parties in relation to the draft determination before making its final decision.  Parties wishing to make submissions should do so by 6 September 2010.  Please refer to the website for further information about making a submission to the ACCC.

Collective bargaining refers to competitors collectively negotiating terms and conditions with a supplier or customer. Without authorisation, it can raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC may grant authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.