The Australian Competition and Consumer Commission has issued a draft decision proposing to allow Western Australian broiler chicken growers to collectively bargain with their processors.
The WABGA’s proposed collective bargaining arrangements are likely to deliver benefits to the community by providing a greater opportunity for broiler chicken growers to have more effective input into the terms and conditions of their contracts with processors. The collective bargaining arrangements are also likely to generate some transaction cost savings.
Balanced against this the ACCC considers that the collective bargaining arrangements are unlikely to result in any significant detriment. In particular the collective bargaining groups are processor specific and will not involve common representation. The arrangements are also voluntary for all parties–any party that does not wish to participate in collective bargaining are free to negotiate contracts individually.
The ACCC has previously authorised similar collective bargaining arrangements for chicken growers in Victoria, South Australia and Tasmania.
The ACCC has also granted interim authorisation to allow the parties to commence negotiations if they so wish while the ACCC continues in its consideration of the substantive application for authorisation.
In December 2010, following a review of the effectiveness of the Western Australian Chicken Meat Industry Act 1977, the Western Australian Economic Regulatory Authority recommended that the Act be repealed. This recommendation was accepted by the Minister for Agriculture and Food and the Act was allowed to expire on 31 December 2010.
In recommending repeal of the Act, the Economic Regulation Authority noted collective bargaining by growers with their processors as a potential way of negotiating growing contracts.
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, www.accc.gov.au/AuthorisationsRegister. Parties wishing to make submissions should do so by Friday, 27 May 2011.
Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.