The Australian Competition and Consumer Commission today granted interim authorisation to allow Western Australian chicken growers to collectively bargain with their processors.
ACCC chairman Graeme Samuel said interim authorisation will provide stability for the industry.
"This decision enables growers and processors to come together and negotiate contract terms and conditions in the newly deregulated environment while the substantive application for authorisation is being considered," Mr Samuel said.
Until recently, growing fees and agreements in Western Australia were regulated by the Chicken Meat Industry Act. In December 2010, following a review of the effectiveness of this Act the Western Australian Economic Regulatory Authority recommended that the Act be repealed. This recommendation was accepted by the WA Minister for Agriculture and Food and the Act was allowed to expire on 31 December 2010.
In recommending repeal of the Act, the Economic Regulation Authority noted collective bargaining by growers with their processors as a potential way of negotiating growing contracts. The Western Australian Broiler Growers' Association has now applied for authorisation, on behalf of its member chicken growers, to collectively bargain to establish new contractual terms and conditions with chicken processors.
"Importantly, collective bargaining will be voluntary for both growers and processors and any party that does not wish to participate in collective bargaining will be free to negotiate contracts individually," Mr Samuel said.
Grower bargaining groups will be formed based on the processor with whom they are affiliated.
The ACCC has previously authorised similar collective bargaining arrangements for chicken growers in Victoria, South Australia and Tasmania.
The granting of interim authorisation in no way binds the ACCC in its consideration of the substantive application for authorisation. Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
The ACCC will now proceed to prepare its draft determination. Further information on this matter is available on the public register on the ACCC's website www.accc.gov.au/AuthorisationsRegister.