ACCC proposes to approve collective bargaining between Licensed Post Offices and Australia Post

16 August 2017

The Australian Competition and Consumer Commission has issued a draft determination proposing to grant authorisation to Licensed Post Office Group Ltd (LPO Group) and its current and future licensed post office members to collectively negotiate with Australia Post.

LPO Group and its members are seeking to collectively negotiate and enter into a new agreement with Australia Post, or vary the agreements that are currently in place for the provision of postal and distribution services by Licensed Post Offices (LPOs).

“The conduct is likely to result in public benefits such as cost savings from a single negotiation process, and will facilitate more effective negotiation between the LPO Group members and Australia Post,” ACCC Deputy Chair Dr Michael Schaper said.

Under the proposed arrangements, LPO Group members who have opted-in to the collective negotiations will agree not to negotiate with Australia Post on an individual basis while negotiations are ongoing with Australia Post.

“The collective negotiations are voluntary and it is up to each LPO Group member and Australia Post to decide whether they would benefit from such negotiations,” Dr Schaper said.

“The ACCC does not consider that the proposed conduct is likely to result in significant public detriment given that competition between licensed post offices is limited, negotiations are entirely voluntary in nature, and authorisation does not extend to any collective boycott of products or services supplied by LPOs.”

It is not a condition of LPO Group membership that members join the collective bargaining group, and LPO Group members are not prevented from also joining other industry representative groups. LPO Group members are also free at all times to negotiate individually with Australia Post on their arrangements with Australia Post including by opting out at any time from any collective negotiations.

The ACCC is now seeking submissions from the Applicants and interested parties on the draft determination before the ACCC issues its final determination by November this year.

Further information, including the draft decision, is available from the ACCC’s Authorisations public register: LPO Group Limited - Authorisations - A91583 & A91584

Background

LPO Group is an industry organisation formed in August 2013 to represent the interests of its members, who qualify for membership through their ownership of a Licensed Post Office business.

Australia Post currently has a network of 2881 LPOs. LPOs are private businesses which are granted an indefinite licence by Australia Post to operate a post office using Australia Post products, branding and systems. LPOs provide a number of products and services as part of Australia Post's retail network. Australia Post provides each LPO with specified fees, commissions or discounts in relation to these products and services.

LPO Group was granted interim authorisation to collectively negotiate and enter into agreements with Australia Post by the ACCC on 30 June 2017. This authorisation was limited to the annual review of licensee payments under the LPO Agreement, as well as the appropriate level of remuneration for any new services introduced by Australia Post during the period of interim authorisation. The interim authorisation decision does not impose any obligation for any party to participate in collective bargaining.

Notes to Editors

Authorisation provides protection from legal action for conduct that may otherwise breach the competition provisions of the Competition and Consumer Act 2010 (the Act). Broadly, the ACCC may grant authorisation if it is satisfied that the benefit to the public from the conduct outweighs any public detriment, including from a lessening of competition.

About the authorisation process:

  • Generally, the ACCC can grant authorisation if it is satisfied that the public benefit from the conduct outweighs any public detriment, including any lessening of competition.
  • The ACCC is required to publish a draft decision (‘determination’) in relation to an application. This is usually 3–4 months after receiving an application.
  • The ACCC will conduct public consultation with interested parties both before and after a draft determination.
  • The ACCC will generally release its final decision (‘determination’) 5–6 months after receiving an application.
Release number: 
MR 137/17
ACCC Infocentre: 

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