ACCC to allow union to negotiate with Parmalat and Nat Foods

Posted by James Ferre on 24th July 2009

The Australian Competition and Consumer Commission proposes to allow the Transport Workers Union of Australia SA/NT Branch to represent South Australian milk vendors in contract negotiations with dairy processors National Foods and Parmalat.

Under the ACCC’s proposed decision, the TWU would bargain collectively* on behalf of vendors.

The vendors buy milk from the processors to sell to shops and home-delivery customers or deliver it to major retailers, such as supermarket chains, for a fee from the processors.

“The ACCC considers that the proposed collective bargaining arrangements are likely to deliver public benefits by allowing vendors more effective input into contract terms and conditions than would be the case if they each dealt individually with the processors,” ACCC Chairman, Graeme Samuel, said. “The arrangements may also lead to transaction cost savings.”

“The ACCC considers that there are several features of the proposed arrangements that limit any public detriment. In particular, the proposed arrangements are voluntary and do not involve collective boycott activity – that is, agreements between parties to, for example, refuse to deal with another party.”

The TWU estimates there are about 125 vendors operating in South Australia. In 2005, the ACCC authorised the Milk Vendors Association of South Australia to engage in similar collective bargaining for five years. The association has since become part of the TWU. The ACCC has noted there would be separate groups to bargain with each processor.

The ACCC is inviting public comment on the proposal until August 12. Their draft determination will be available from the ACCC website at: www.accc.gov.au/AuthorisationsRegister.

* Collective bargaining refers to competitors collectively negotiating terms and conditions with a supplier or customer and can raise concerns under the competition provisions of the Trade Practices Act 1974. The ACCC may, however, grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.