Appeal for collective negotiations for chicken supply

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Commerce Commission, Wellington

September 25, 2017

The Commerce Commission has received an application from the Waikato – Bay of Plenty Chicken Growers Association Incorporated seeking authorisation on behalf of its members to collectively negotiate the terms and conditions for its members to supply chicken growing services to Inghams Enterprises (NZ) Pty Limited.
Ingham’s is one of the largest chicken processors in New Zealand. It outsources its chicken growing requirements to contract growers located in close proximity to its processing plant near Ngarua. Ingham’s provides the growers with day-old chicks to be reared according to specifications, as well as other inputs such as feed and medications.
At present, all 37 growers in the Waikato and the Bay of Plenty regions that provide chicken growing services to Ingham’s are members of the Association.
Benefits to people

The Association considers that the lessening of competition as a result of its members collectively negotiating with Ingham’s would be outweighed by the resulting public benefits. These benefits include a reduction in the costs of negotiating the terms and conditions of supply, as compared to a situation where Ingham’s would negotiate with growers individually.
Public submissions on the application can be made in writing to registrar@comcom.govt.nz with the reference Waikato – Bay of Plenty Chicken Growers Application in the subject line of the email. Submissions close at 5 pm on October 11, 2017.
A public version of the application is available on our website.
Background
The Commission may grant authorisation under section 58 of the Commerce Act for certain agreements that may otherwise breach the Act if satisfied that the public benefits of the agreements outweigh the detriments arising from the loss of competition.
The granting of a restrictive trade practice authorisation protects the applicant from court action under the Commerce Act by the Commission and private individuals.
The Commission’s Authorisation Guidelines explain when anti-competitive agreements will be authorised and the process used to determine authorisation applications.
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