ACCC allows Tasmanian vegetable growers to collectively bargain

18 November 2004

The Australian Competition and Consumer Commission has authorised* Tasmanian vegetable growers to collectively bargain with Tasmania's two vegetable processors, McCain and Simplot, ACCC Chairman, Mr Graeme Samuel, said today.

"Most Tasmanian vegetable growers are small businesses and the ACCC sees a benefit in allowing them to collectively bargain with their processors", Mr Samuel said. "The ACCC was of the view that a number of benefits would result from the authorisation, the most significant of which was the opportunity for growers to have more effective input into contract terms and conditions. The ACCC also considered that some, albeit limited, cost savings would accrue from allowing the growers to negotiate collectively rather than individually.

"The competitive pressure to which processors and growers are subject, particularly in supplying retail markets, would likely ensure that these costs savings would, for the most part, be passed on to consumers.

"The ACCC considered that any detriment that may flow from the collective bargaining arrangements was likely to be negligible. The ACCC considered the difference between the level of competition amongst Tasmania's vegetable growers over contract terms and conditions with or without the authorised arrangements would be small.

"More generally, allowing growers to collectively bargain does not reduce the scope for individual growers to negotiate variations on collectively negotiated arrangements or to negotiate with their processor individually outside of the authorised arrangements".
 
Authorisation was granted for growers to collectively bargain on a commodity group by commodity group basis. For example, McCain potato growers in one group, Simplot potato growers in another, McCain pea growers in another, and so on.** Authorisation was also granted for the Tasmania Farmers and Graziers Association to assist growers in their negotiations.

The ACCC granted interim authorisation to the arrangements in April 2004 and issued a draft determination in September 2004. This has allowed the growers to collectively bargain with McCain and Simplot while the ACCC considered the merits of their application.    

Authorisation was granted for five years.

*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.

** Authorisation was granted for growers to negotiate collectively in each of the following grower groups:

  • Simplot: processed potato growers, seed potato growers, pea growers, bean growers, carrot growers, and brassica growers and
  • McCain: processed potato growers, seed potato growers, pea growers, bean growers, brassica growers.

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Release number: 
MR 257/04
ACCC Infocentre: 

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