In response to a request from the ACCC, Canegrowers clarified that the proposed collective negotiations would be conducted by local Canegrowers organisations on behalf of growers supplying cane to their local sugar miller.

Canegrowers also intends to share information with growers across growing regions about common cane supply issues. Canegrowers confirmed that it does not intend to negotiate a single, state-wide cane supply agreement.

“The ACCC has approved many collective bargaining arrangements involving groups of farmers supplying their local processor. This is another matter where collective bargaining can provide an opportunity for growers, millers and sugar marketers to negotiate mutually beneficial contracts,” said ACCC Commissioner, Mick Keogh. “The proposed arrangements are likely to result in public benefits from transaction cost savings, by facilitating more effective and timely grower input into negotiations with mill owners.”

“Under the current industry framework where growers have a right to choose a marketer for their ‘grower economic interest’ (or GEI) sugar, the ACCC also considers there are benefits in allowing growers to collectively bargain with mill owners and marketers over terms relating to cane supply and the marketing of GEI sugar.  This is likely to facilitate grower choice, and therefore competition, when growers choose GEI sugar marketing services,” he added.

“The ACCC does not consider that the proposed arrangements are likely to result in significant public detriment given that collective negotiations are voluntary for growers, millers and marketers and will continue to reflect regional differences.”

The ACCC is now seeking submissions from Canegrowers and interested parties in relation to its draft determination before making a final decision, expected by March 2017.

Background

Canegrowers, representing the interests of sugar cane growers in Queensland, seeks authorisation for proposed collective bargaining conduct with millers and sugar marketers. 

Since 1999, the Sugar Industry Act in Queensland has allowed cane growers to collectively bargain certain terms and conditions of their Cane Supply Agreements with their local mill.

Canegrowers’ application seeks authorisation to collectively negotiate a broader range of terms and conditions of cane supply with millers and sugar marketers, including in relation to GEI sugar marketing terms, and to facilitate information sharing with growers across growing regions.

While there is ongoing debate within the industry about the recent Marketing Choice amendments to the Sugar Industry Act, the ACCC’s role in assessing this application is not to comment on this, but rather to consider what benefits and detriments are likely to result from the proposed conduct, given the framework within which the industry operates.

Further information, including a copy of the draft decision, is available from the ACCC’s Public Registers.