ACCC proposes to allow collective bargaining for potato growers

The Australian Competition and Consumer Commission proposes to authorise the South East Potato Growers Association and the Victorian Potato Growers Council and their members to collectively bargain with potato buyers.

“The ACCC considers that collective bargaining by potato growers may allow them to have greater input into the terms and conditions of their contracts with potato processors, potentially leading to a more efficient Australian potato growing industry,” ACCC Chairman Rod Sims said.

The ACCC’s draft determination distinguishes between the collective bargaining conduct that potato growers would be allowed to engage in and the process that the Victorian potato growers would engage in to set a recommended price for seed potatoes.

The ACCC does not propose to authorise the seed potato growers to set a recommended price for seed potatoes.

There are approximately 70 potato grower businesses in South Australia and 17 of these belong to SEPGA and largely supply processing potatoes in a limited market. VPGC represents around 290 potato growers in Victoria who supply a wide range of different potato types including fresh, processing and seed.

The ACCC previously authorised SEPGA’s and VPGC’s collective bargaining arrangements in 2007, when it found that these arrangements would provide more benefit to the public than detriment.

Authorisation provides statutory protection 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 is seeking submissions from interested parties in relation to its draft determination in this matter. In particular, the ACCC is seeking submissions regarding the seed price recommendation. Submissions close on 19 November 2012 and may be posted or lodged online.