ACCC proposes to allow small liquor retailers to collectively bargain

The Australian Competition and Consumer Commission today proposed to authorise Liquor Stax Australia to collectively bargain with a range of wholesale suppliers.

Liquor Stax is seeking authorisation, on behalf of a group of around 200 small businesses comprising liquor merchants and hotels, to collectively bargain with around 60 wholesale suppliers of inputs such as alcohol, cigarettes, poker machines and confectionery as well as services such as advertising, insurance and communications.

The ACCC considers that the collective bargaining arrangements are likely to result in public benefits by providing Liquor Stax members with greater input into the terms and conditions of supply contracts. In addition, suppliers and members are both likely to experience transaction cost savings as a result of reducing the number of parties to negotiations.

Participation in the collective negotiations is voluntary for all parties and does not impose any restrictions on a member's choice of suppliers. The ACCC proposes to grant authorisation for five years.

The ACCC may authorise this type of arrangement when it is satisfied that the public benefit from the conduct outweighs any public detriment. Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974.

The ACCC now invites comments on the draft determination. The ACCC's draft determination and information about making a submission will be available from the ACCC website. Parties wishing to make submissions should do so by 22 September 2010.