The Australian Competition and Consumer Commission has issued a draft determination which proposes to authorise* collective bargaining by Tasmanian chicken growers with Inghams, for a further five years, ACCC Chairman, Mr Graeme Samuel, said today.
"The ACCC sees a benefit in allowing chicken meat growers in Tasmania, most of whom are small businesses, to collectively bargain with Inghams", Mr Samuel said. "The benefit primarily flows from cost savings that will accrue from growers negotiating collectively rather than individually.
"The ACCC considers that these costs savings are likely to be passed on to consumers, at least in part, because of the competitive pressure to which Inghams and its growers are subject from retailers and fast food chains.
"The ACCC considers that any detriment that may flow from the proposed collective bargaining arrangements is likely to be negligible. In particular, the ACCC considers the combination of increasing competition from mainland states and pricing pressure on Inghams from its retail buyers mitigates the potential for anti-competitive detriments from the arrangements".
The ACCC will consult on its draft determination before making a final decision. Parties wishing to make a submission to the ACCC on this issue should contact the ACCC for further details.
The ACCC initially granted authorisation for the collective bargaining arrangements between Inghams and its growers in 1999. However, the immunity for this arrangement expired in late 2003. Prior to the authorisation expiring, the parties applied to have the original authorisation revoked and a substitute authorisation, in essentially the same terms, granted for a further five years.
The ACCC granted interim authorisation to the substitute authorisation in December 2003. This allowed the growers to continue to collectively bargain with Inghams while the ACCC considers the merits of the application.
* The Trade Practices Act 1974 prohibits certain forms of anti-competitive agreements, including agreements between competitors that limit their ability to deal with whom they choose or on the terms they choose (including price). Authorisation provides immunity from court action under the Act arising from such agreements but can only be granted where the ACCC is satisfied that the public benefit flowing from the conduct outweighs any public detriment.