The Australian Competition and Consumer Commission has just received a formal application from the Australian Dairy Farmers Federation on behalf of groups of dairy farmers to collectively negotiate pricing and supply agreements with processors.* The application seeks authorisation for a five year period.
ACCC Chairman, Professor Allan Fels, said that the application reflected farmer concerns about recent price movements following deregulation of the industry from 1 July 2000. It would be given careful and expeditious consideration by the ACCC.
"The application is couched in broad terms. However from earlier discussion with the ADFF, the ACCC understands that the ADFF is applying to give individual groups of farmers the right to collectively negotiate with the specific processor which they supply.
"The ACCC has sought further clarification from the ADFF and is awaiting further particulars on the nature and extent of the proposed conduct.
"The onus will be on the ADFF to show there is a public benefit arising from the conduct sufficient to outweigh any detriment caused by any lessening of competition. The ACCC will test these claims through a transparent process involving consultation with industry participants, governments and consumer bodies.
"The ACCC welcomes comment from interested parties on the ADFF proposal. The ACCC may wish to seek further comments from interested parties once it has received details about the nature and extent of the collective negotiation agreements for which authorisation is sought.
"'While the ACCC will give this matter a high priority, the statutory requirement for public consultation, and the need to assess what appears to be a complex series of agreements, in possibly a variety of markets, may mean it is some months before the ACCC is in a position to issue a decision".
The application follows a recent ACCC draft decision proposing to authorise Premium Milk Supply Pty Ltd to collectively bargain farm gate prices and milk standards, on behalf of participating south east Queensland dairy farmers, with the processor to which they supply, Pauls Limited.
* Authorisation provides exemption from legal action for conduct that might otherwise breach the Act. The ACCC can grant such exemptions only where it is satisfied that the detriment of the anti-competitive conduct in question is outweighed by accompanying public benefit.