The Australian Competition and Consumer Commission welcomes the Australian Competition Tribunal's decision to authorise groups of dairy farmers to collectively negotiate terms of supply for raw milk with dairy processors.
The Tribunal's determination was made by consent of the ACCC, National Foods Limited and the applicant for authorisation, the Australian Dairy Farmers' Federation.
"The Tribunal's determination will allow dairy farmers to realise the benefits of collective negotiations and assist them in adjusting to a more competitive environment following the deregulation of the industry", ACCC Chairman, Professor Allan Fels, said today. "The authorisation also recognises the need to ensure that any collective negotiations between farmers do not significantly affect the price that consumers pay for fresh milk".
The Tribunal's decision also allows the ADFF to separately discuss tender processes with the major supermarket chains.
In granting the authorisation in terms agreed by all the parties to the review the Tribunal accepted the submissions of the ACCC, NFL and the ADFF that it was appropriate in all the circumstances to make the determination.
The authorisation will be effective until 1 July 2005 and will now allow groups of dairy farmers that have a "shared community interest" to form collective bargaining groups through which they may collectively negotiate terms of supply, including pricing, with a dairy processing company that each member of the group wishes to supply.
In making the determination the Tribunal noted that the authorisation does not compel any party to participate in collective bargaining. Nor will it impact, unless the parties so choose, on arrangements that are currently in place between dairy processing companies (including cooperatives) and their dairy farmer suppliers.