The Australian Competition and Consumer Commission has granted conditional authorisation* to Australian Dairy Farmers Limited, allowing its dairy farmers to continue to collectively bargain with dairy processors.
Dairy farmers have been able to collectively bargain with their respective dairy processors since 2002. The collective bargaining arrangements have now been reviewed by the ACCC and it has concluded that they continue to be in the public interest. In particular, the ACCC considers that the arrangements are likely to provide a mechanism through which dairy farmers can have more effective input into their raw milk supply contracts. The ACCC has accordingly extended the immunity previously granted to dairy farmers until 30 June 2011.
"The authorisation will continue to allow dairy farmers throughout Australia to collectively negotiate their contracts with their local processor and to continue to access market opportunities", ACCC Chairman, Mr Graeme Samuel, said today.
In seeking to have the collective bargaining arrangements continued, the ADF argued that the arrangements have the support of both processors and retailers and have resulted in benefits to the public and to the dairy industry by way of improved efficiencies and transaction cost savings.
"Participation in the collective bargaining process remains entirely voluntary for both dairy farmers and dairy processors and the arrangements do not involve collective boycott activity", Mr Samuel said. "The ACCC has imposed a number of conditions which will reduce the potential size of the collective bargaining groups; limit the potential for information sharing; and require the collective bargaining groups to be open and transparent about their membership and the basis on which the groups have formed. These conditions are similar to the conditions imposed under the 2002 authorisation.
The determination is available on the ACCC's website.