The Australian Competition and Consumer Commission has issued a draft decision proposing to allow South Australian broiler chicken growers to collectively bargain with Inghams for ten years.
The proposed collective bargaining arrangements are likely to provide a greater opportunity for broiler chicken growers to have more effective input into the terms and conditions of their contracts with Inghams. The collective bargaining arrangements are also likely to generate some transaction cost savings.
There are approximately 68 chicken growing farms contracted to three processors in South Australia. The ACCC notes that chicken growers have historically had limited opportunities to switch between processors and that they often prefer to bargain collectively with the processor that they supply.
The ACCC has previously authorised similar collective bargaining arrangements for chicken growers in Western Australia, Victoria, South Australia and Tasmania.
The ACCC granted interim authorisation to allow the applicants to commence collective negotiations, while the ACCC completes its consideration of the substantive application for authorisation.
Authorisation provides statutory protection 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.
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’s website, www.accc.gov.au/AuthorisationsRegister.
Any person who wishes to make a submission or request a pre-decision conference should do so by Friday, 4 May 2012.