ACCC permits chicken growers to collectively negotiate with Inghams

Posted by James Ferre on 27th March 2009

The Australian Competition and Consumer Commission has allowed 18 chicken growers in South Australia to seek to collectively negotiate the terms and conditions of their growing contracts with Inghams Enterprises.Collective bargaining refers to two or more competitors collectively negotiating terms and conditions with a supplier or customer. Without protection, it can raise concerns under the competition provisions of the Trade Practices Act 1974, the ACCC advised.

Small businesses can obtain protection from legal action under the Act for collective bargaining arrangements by lodging a notification with the ACCC. In this case, the South Australian Farmers Federation lodged a collective bargaining notification on behalf of the chicken growers.

Provided the ACCC does not object, protection commences 14 days after lodgment. Under the Act, the ACCC will only object to and remove the immunity provided by a collective bargaining notification when it is satisfied that any public benefits from the arrangement would not outweigh the public detriments.

ACCC Chairman, Mr Graeme Samuel, said the proposed arrangements will provide greater opportunity for these chicken growers to provide input into their contract terms and conditions.

“This will allow growers to achieve more balanced and mutually beneficial commercial outcomes which may also result in transaction cost savings,” he explained.

The ACCC notes that the proposed arrangements are voluntary, enabling any party that does not consider the collective process to be in their commercial interests the option of not participating.

Protection afforded by the notification commenced on 14 March 2009 and expires in three years, with a review of the notification to take place at a later stage if concerns arise.

More information on the notification is available on the public register on the ACCC website.