Member stores of the PaintRight banner group will be able to bargain as a group with suppliers after the Australian Competition and Consumer Commission concluded that the arrangements will benefit the public.
PaintRight Ltd has notified the ACCC that it wants to negotiate with nearly 60 nominated suppliers on behalf of 56 stores operating under the PaintRight name. Individual stores in the group are independently owned and operated.
"The arrangements have the ability to deliver cost savings on both sides of the negotiations, aiding competition and flowing through to better prices and/or service for consumers," ACCC Chairman, Graeme Samuel, said.
"Also, there are some important limits to the arrangements. The bargaining group is confined to a relatively small number of retailers and PaintRight is not proposing to withhold the group's custom as a bloc – that is, there won't be collective boycotts," Mr Samuel said.
"This means suppliers will be free to choose whether to participate in the arrangements.
"Furthermore, the contracts won't be one-size-fits-all – individual stores will be able to seek variations to the collective deals, where appropriate."
Collective bargaining refers to competitors collectively negotiating terms and conditions with a supplier or customer and can raise concerns under the competition provisions of the Trade Practices Act 1974. Small businesses can obtain protection from related legal action under the Act by lodging a notification with the ACCC.
Provided the ACCC does not object to the notified arrangements, protection commences 14 days after lodgment. The ACCC will only remove the immunity provided by a collective bargaining notification when satisfied that any public benefits from the arrangements would not outweigh the public detriments.
Protection through the notifications lasts for three years, and the ACCC may review the notifications at a later stage, should concerns arise.
The ACCC's assessment can be found at www.accc.gov.au/CollectiveBargainingRegister