Application by National Foods Ltd [2002] ACompT 3

AUSTRALIAN COMPETITION TRIBUNAL

Application by National Foods Ltd [2002] ACompT 3 TRADE PRACTICES – authorisation – application to the Australian Competition Tribunal under s 101 of the Trade Practices Act 1974 (Cth) to review a determination by the ACCC – parties seeking determination by consent to vary conditions attaching to the authorisation – whether appropriate to make a determination by consent under s 101(1A) of the Trade Practices Act. APPLICATION BY NATIONAL FOODS LTD – File No 2 of 2002 JUSTICE von DOUSSA, PROF R C DUNCAN, MR G F LATTA MELBOURNE 16 AUGUST 2002

IN THE AUSTRALIAN COMPETITION TRIBUNAL

File No 2 of 2002

RE: APPLICATION FOR REVIEW OF A DETERMINATION OF THE ACCC MADE ON 12 MARCH 2002 IN RESPECT OF AN AUTHORISATION TO ENABLE COLLECTIVE NEGOTIATION BY DAIRY FARMERS OF CONTRACTUAL TERMS AND CONDITIONS WITH DAIRY PROCESSING COMPANIES

BY: NATIONAL FOODS LTD

(ACN 004 486 631)

TRIBUNAL: JUSTICE von DOUSSA (PRESIDENT)

PROFESSOR R C DUNCAN

MR G F LATTA

DATE OF ORDER: 16 AUGUST 2002

WHERE MADE: MELBOURNE

THE TRIBUNAL DETERMINES BY CONSENT THAT: 1. The determination of the Australian Competition and Consumer Commission (the Commission) dated 12 March 2002 in respect of Authorisation A90782 is varied such that authorisation is granted to application A90782 in the following terms. 2. Subject to the conditions C1 to C12 stated in par 3 of this determination: (a) groups of dairy farmers are authorised 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; (b) the Australian Dairy Farmers Federation (the ADFF) is authorised to hold general, non-specific, discussions with supermarkets, on an individual and voluntary basis, regarding the impact of tender processes on dairy farmers. 3. Pursuant to s 91(3) of the Act, authorisation is subject to the following conditions. C1 ADFF or any other common agent (including a farmer) is not to be involved in price and supply negotiations between dairy farmers and dairy processing companies. C2 Collective bargaining groups can only be formed by dairy farmers that have a "shared community interest". Dairy farmers will have a shared community interest for the purposes of this authorisation where they have a common interest in being long-term suppliers acceptable to the processor concerned and satisfy one of the following criteria: (a) the dairy farmers all have similar supply patterns and are all located within a distance in which milk can economically be delivered to that processor's plant; (b) the dairy farmers supply a specialty raw milk product. For the purposes of C2 there are two general categories of "supply patterns": · seasonal supply; and · all year round supply. C3 Dairy farmers that satisfy one of the criteria in C2 can form cross-regional collective bargaining groups, however these groups must not comprise all of the dairy farmers that operate within any of the following regions: · Far north Queensland; · Central Queensland; · Southeast Queensland; · Northern New South Wales; · Central New South Wales; · Southern New South Wales; · Western Victoria; · Eastern Victoria; · Northern Victoria; · South Australia; · Western Australia; and · Tasmania. C4 Dairy processing companies are free to choose whether or not to negotiate with collective bargaining groups of dairy farmers. Dairy processing companies are free to negotiate with one, or some, of the dairy farmers within a particular group based on their own commercial requirements. C5 Dairy farmer participation in collective bargaining groups is voluntary. Farmers retain the right to negotiate and enter into individual contracts with dairy processing companies. Farmers can leave collective groups on giving reasonable notice. C6 Collective bargaining groups of dairy farmers, individual farmers or farmer representatives may not prevent or restrict other farmers from supplying particular dairy processing companies. C7 Each member of a collective bargaining group must not discuss its confidential negotiations with a particular dairy processing company with members of other collective bargaining groups, individual farmers outside the group or other farmer representatives. Members of collective bargaining groups may not disclose information obtained in negotiations with dairy processing companies, that at least one party considers to be confidential, to members of other collective bargaining groups, individual farmers outside the group or other farmer representatives. If a member of a collective bargaining group participates in another collective bargaining group, that member must not disclose information that at least one of the parties considers to be confidential and obtained as a result of participating in the former collective bargaining group to members of the latter collective bargaining group. C8 All collective bargaining groups must notify ADFF of the names and locations of the farms comprising that group, including the shared community of interest criteria that the group satisfies. ADFF must be notified of any changes to the composition of collective bargaining groups. C9 ADFF must maintain a register of collective bargaining groups including the names and locations of all farms comprising each group. This register is to be kept up to date. C10 ADFF must allow any dairy processor and the Commission, upon their request, access to the register free of charge during normal business hours. C11 Parties to the authorised arrangements must provide the Commission with any contract that is entered into under these arrangements upon the Commission's request. C12 Dispute Resolution 12.1 Processors and Collective Bargaining Groups (CBGs) will cooperate to ensure that any disputes in relation to the formation of CBGs or the negotiation of contracts between processors and CBGs are resolved promptly and efficiently by mutual negotiation. Where a dispute arises, the party complaining (Complainant) will prepare a written complaint (the Complaint) setting out: (a) the nature of the dispute; (b) what outcome the Complainant wants; and (c) what action the Complainant thinks will settle the dispute, and will deliver the Complaint to the other party. 12.2 Reference to Mediator On delivery of a Complaint, processors and CBGs must make all reasonable efforts to resolve the dispute. Within eight weeks of receipt of a Complaint, the party receiving the Complaint must respond in writing to the Complainant. If the dispute is not resolved within eight weeks, either party may refer the matter to a mediator. 12.3 Mediator