The Australian Competition and Consumer Commission has authorised* Tasmanian chicken growers to continue collectively bargaining with their processor Inghams for a further six years, ACCC Chairman, Mr Graeme Samuel, said today.
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 granted in essentially the same terms.
"Most Tasmanian chicken meat growers are small businesses and the ACCC sees a benefit in allowing them to collectively bargain with Inghams", 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 cost savings that would accrue from allowing the growers to negotiate collectively rather than individually.
"The competitive pressure to which Inghams and its growers are subject from retailers and fast food chains would likely ensure that these costs savings would, for the most part, be passed on to consumers.
"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. As such, the ACCC considers that any detriment that may flow from the proposed collective bargaining arrangements is likely to be negligible".
The ACCC granted interim authorisation to the substitute authorisation in December 2003 and issued a draft determination in April 2004. This has allowed the growers to continue to collectively bargain with Inghams while the ACCC considered the merits of their 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.