The Australian Competition and Consumer Commission today issued a draft decision proposing to grant authorisation* to the Australian Dairy Farmers Limited and its member dairy farmers for a further five years.
"The ADF has sought to extend the immunity granted to groups of dairy farmers in 2002 which allowed them to collectively negotiate terms of supply for raw milk with dairy processors", ACCC Chairman, Mr Graeme Samuel, said today.
"The ACCC considers that the ADF arrangements will continue to result in benefits to the public:
- by allowing dairy farmers to explore new market opportunities
- by producing transaction cost savings, and
- by improving the input of dairy farmers into contract terms and conditions.
"Importantly, the ADF arrangements are voluntary – for both dairy processors and dairy farmers – this allows the industry the flexibility to take advantage of the benefits of collective bargaining but also to opt out of the arrangements if they are not in the individual's or the organisation's interests.
"The ACCC has some concerns that, without suitable conditions, the ADF arrangements may not be in the public interest. This is similar to the conclusion reached by the ACCC and also the Australian Competition Tribunal when the ADF arrangements were first assessed and approved in 2002.
"The ACCC considers however that the 2002 conditions would benefit from clarification and, where appropriate, simplification so that the full benefits of the ADF arrangements may be achieved".
The ACCC is now seeking submissions from the dairy industry in relation to the draft determination and in particular the revisions it has proposed to make to the 2002 conditions. Submissions can be made to: The General Manager, Adjudication Branch, Australian Competition and Consumer Commission, PO Box 1199, Dickson, ACT, 2602.
Submissions can also be lodged by email at adjudication@accc.gov.au.
In the meantime, interim authorisation** granted to the ADF arrangements in May of this year will allow groups of dairy farmers to continue to form collective bargaining groups and to collectively negotiate with dairy processing companies.