Dairy Western Australia Ltd - Authorisation - A90961 & A90962

Summary

In March 2005 Dairy WA sought authorisation to establish a milk negotiating agency which would collectively bargain on behalf of dairy farmers the terms and conditions (including price) of supply and delivery of raw milk with processors and/or retailers (collective bargaining).

Dairy WA also sought authorisation to allow its members to withhold the supply of raw milk from processors under certain circumstances (collective boycott). However, on 30 November 2005 Dairy WA withdrew its application for authorisation of the proposed collective boycott arrangements.

On 20 February 2006 the ACCC issued a determination denying Dairy WA's application for authorisation as it considered that the proposed arrangement was unlikely to result in a net benefit to the public. Having considered the information provided to it, the ACCC concluded that, if authorised, the arrangements could damage competition and industry participants, including dairy farmers themselves.

The ACCC was particularly concerned over:
- the potential for the proposed milk negotiating agency to introduce local market-wide agreements and significantly depress competition between dairy farmers on matters such as price;
- the potential for the proposed arrangements to unduly restrict the ability of dairy farmers to deal with processors and limit their input into their milk supply contracts with the processors;
- the potential for the proposed milk negotiating agency to have a significant detrimental impact on Western Australian dairy processors and in particular the current milk balancing arrangements in the state.

In its assessment of Dairy WA?s application, the ACCC was mindful that Western Australian dairy farmers can continue to collectively bargain under the terms of the interim authorisation granted to Australian Dairy Farmers Ltd on 18 May 2005 pending the release of the ACCC?s final determination in relation to ADF?s application for authorisation of substitute authorisation A90966.

Applicant(s)

  • Dairy Western Australia Ltd

Authorisation number(s)

  • A90961
  • A90962

Submissions - before draft decision

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