The Australian Competition and Consumer Commission will not grant interim authorisation* at this time to a group of Western Australian dairy farmers to collectively bargain with milk processors for the supply of raw milk.
Dairy WA, representing a group of dairy farmers in WA, had applied to the ACCC for interim authorisation to allow the establishment of a milk negotiating agency. The agency was to negotiate with processors on behalf of dairy farmers. Interim authorisation was sought to allow it to enter into preliminary negotiations.
"The ACCC considers that the complex arrangements proposed by Dairy WA require careful, detailed consideration to assess the public benefits and anti-competitive detriments that may follow", ACCC Chairman, Mr Graeme Samuel, said today.
While the ACCC has considered a number of collective bargaining arrangements in the past, the arrangements proposed by Dairy WA are very different and must be closely examined.
While the arrangements were put before the ACCC for its consideration in March of this year, Dairy WA is still in the process of developing and finalising the operational activities of the proposed agency and many aspects of its activities are yet to be approved by the farmers Dairy WA represents.
"In these circumstances the ACCC cannot be satisfied that the market could be restored to its pre-interim state if the substantive authorisation is not granted. Accordingly it would not be appropriate for the ACCC to grant interim authorisation at this time.
"The ACCC is sensitive to the difficulties that have been faced by dairy farmers following deregulation and the ongoing influence of drought", Mr Samuel said. "To the extent that collective bargaining can help dairy farmers to responding to such difficulties, the ACCC notes that it has recently granted interim authorisation to allow the continuation of the national dairy farmer collective bargaining program (sought by Australian Dairy Farmers**).
"The national collective bargaining program, while quite different to the arrangements proposed by Dairy WA, will continue to allow WA dairy farmers to negotiate with processors while the ACCC considers the Dairy WA proposal.
"The ACCC will reconsider Dairy WA's application for interim authorisation at the time of issuing its draft determination".
More information regarding the Dairy WA application and the authorisation process is available by following Authorising anti-competitive conduct and Authorisations links.