National chicken processor Inghams Enterprises' proposal to collectively negotiate fees and conditions with South Australian chicken growers has been authorised for five years by the Australian Competition and Consumer Commission in its final determination.
"The ACCC is confident the arrangements offer a balanced and effective mechanism for Inghams and its growers to operate under during the transition to a deregulated environment," ACCC Chairman, Professor Allan Fels, said today. "This will maintain stability and enhance competition in the industry".
The ACCC will continue to monitor the industry and can review the authorisation if the industry undergoes material change. Chicken growers' fees and contracts were previously negotiated on a state wide basis under the Poultry Meat Industry Act 1969, which is set to be dismantled by the South Australian government after a review of the legislation.
"The decision is significant and particularly important for industries moving towards deregulation, although clearly the chicken meat industry has some characteristics that do not exist in other industries".
The ACCC found that the public benefits arising from the arrangements outweigh the anti competitive effects. It concluded that in the circumstances, the arrangements would:
assist Inghams and its growers to make a smooth transition from regulation to deregulation, ensuring lower adjustment costs for the South Australian chicken meat industry; and provide growers with a degree of countervailing market power in the negotiation process and reduce transaction costs in negotiations.
"All states are examining their anti competitive regulations as part of the Competition Principles Agreement," Professor Fels said. "The ACCC expects to consider issues arising in other states and industries as the regulation reviews continue". A copy of the ACCC determination is available on its public register.
Further information Professor Allan Fels, Chairman, pager (016) 373 536 Ms Lin Enright, Director, Public Relations, (06) 264 2808
