Dairy Problems - The ACCC and Collective Bargaining

The ACCC has reauthorised Parmalat Australia Ltd to continue collective negotiations on behalf of Dairy Farmers in South East QLD and Northern NSW with Premium Milk Ltd for a further ten years.

Premium has been collectively negotiating farm-gate milk prices and milk standards with the dairy processor, Parmalat, under an ACCC authorisation, and with Parmalat’s support, since 2001.

Without authorisation, collective bargaining (competitors collectively negotiating terms and conditions with a supplier or customer) can raise concerns under the competition provisions of the Trade Practices Act 1974.

Is collective bargaining an effective tool to keep market prices down? Or is it ineffective for other reasons?