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Australian potato growers might soon bargain with buyers

06-Nov-2012

The Australian Competition and Consumer Commission, the country’s business and consumer watchdog, has proposed a move to allow selected potato growers associations 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.

However, the commission does not propose authorising seed potato growers to set a recommended price for their seed potatoes.

There are approximately 70 potato grower businesses in southern Australia and 17 of these belong to South-east Potato Growers Association (SEPGA) and largely supply processing potatoes in a limited market. The Victoria Potato Growers Council (VPGC), meanwhile, represents around 290 potato growers in Victoria, and these 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 November 19 and may be posted or lodged online.

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