Re VFF Chicken Meat Growers' Boycott Authorisation

AUSTRALIAN COMPETITION TRIBUNAL

Re VFF Chicken Meat Growers’ Boycott Authorisation [2006] ACompT 2

TRADE PRACTICES – authorisation of collective boycotts – comparison of benefits and detriments – whether confined to anti-competitive detriments

Trade Practices Act 1974(Cth) s 90(8)

Jones v Australian Competition and Consumer Commission (2003) 200 ALR 234 cited
 Media Council of Australia (No 2) (1987) ATPR 40-774 at 48,406 not followed
7-Eleven Stores Pty Ltd (1994) ATPR 41-357 at 42,654 not followed
EFTPOS Interchange Fee Agreement (2004) ATPR 41-999 at [25] cited
QANTAS Airways Limited (2005)ATPR 41-985 at [144]-[149 cited
Australian Association of Pathology Services Practices Inc (2004) ATPR 41-985 at [93]-[94] followed
Scott v Commercial Hotel Merbein Pty Ltd [1930] VLR 75 cited

Pearce and Geddes, Statutory Interpretation in Australia, 5^th ed, 91. 

RE:  VFF CHICKEN MEAT GROWERS’ BOYCOTT AUTHORISATION

JUSTICE HEEREY (DEPUTY PRESIDENT)
DR W J BEERWORTH (MEMBER)
PROFESSOR C WALSH (MEMBER)
21 APRIL  2006
MELBOURNE

IN THE AUSTRALIAN COMPETITION TRIBUNAL

File No 2 of 2005

RE: VFF CHICKEN MEAT GROWERS’ BOYCOTT AUTHORISATION

TRIBUNAL:	JUSTICE HEEREY (DEPUTY PRESIDENT) DR W J BEERWORTH (MEMBER) PROFESSOR C WALSH (MEMBER)
DATE OF DETERMINATION:	21 APRIL 2006
WHERE MADE:	MELBOURNE

THE TRIBUNAL DETERMINES THAT:

Australian Competition and Consumer Commission authorisation A90931 is set aside.

IN THE AUSTRALIAN COMPETITION TRIBUNAL

File No. 2 of 2005

RE: VFF CHICKEN MEAT GROWERS’ BOYCOTT AUTHORISATION

TRIBUNAL:	JUSTICE HEEREY (DEPUTY PRESIDENT) DR W J BEERWORTH (MEMBER PROFESSOR C WALSH (MEMBER)
DATE OF DETERMINATION:	21 APRIL 2006
WHERE MADE:	MELBOURNE

REASONS FOR DETERMINATION

THE TRIBUNAL:

CONTENTS

Par

1.0      INTRODUCTION  [1]
2.0      THE ISSUES  [10]
3.0      THE RELEVANT MARKETS
           3.1      The markets for chicken growing services in Victoria                 [14]
           3.2      The wholesale processed chicken meat market  [17]
4.0      CHICKEN GROWING SERVICES
           4.1      Growers’ role  [24]
           4.2      Contractual performance incentives for Growers  [31]
           4.3      Density, batch rates and turnaround  [34]
           4.4      Tunnel ventilation  [35]
           4.5      Contractual terms  [38]
           4.6      Capacity  [39]
5.0      THE CHICKEN MEAT PRODUCTION PROCESS  [41]
6.0      DEREGULATION OF THE CHICKEN MEAT INDUSTRY               [49]
7.0      SOME RECENT DEVELOPMENTS  [55]
           7.1      The South West Productivity (SWP) Group  [56]
           7.2      Rural Funds Management (RFM)  [58]
8.0      ECONOMIC EXPERTS:  AREAS OF AGREEMENT  [59]
9.0      LEGAL ISSUES  
9.1 The test under s 90(8) [63]
           9.2      Whether exclusionary arrangement  [71]
10.0     APPLYING THE STATUTORY TEST
           10.1     Background  [73]
           10.2     The future with and without test.  [79]
11.0     THE COUNTERFACTUAL
           11.1     Introduction  [85]

11.2Do Processors have market power in the markets

for chicken growing services?

11.2.1Grower’s case  [89]

11.2.2Processors’ case  [93]

11.2.3ACCC’s case  [101]

11.2.4Tribunal’s view  [105]

11.3Are Processors exercising market power in the markets

for chicken growing services?

11.3.1Growers’ case  [127]

11.3.2Processors’ case  [136]

11.3.3ACCC’s case  [140]

11.3.4Tribunal’s view  [149]

11.4What implications follow for the counterfactual if Processors

exercise market power in the markets for chicken growing services?

11.4.1Growers’ case  [170]

11.4.2Processor’s case  [175]

11.4.3 ACCC’s case  [176]

11.4.4Tribunal’s view  [178]

11.4.4.1Monopsonistic behaviour  [179]

11.4.4.2Opportunistic behaviour  [190]

11.4.4.3Overall conclusions about the counterfactual    [198]

12.0THE FACTUAL: LIKELY OUTCOMES WITH A BOYCOTT

AUTHORISATION  [203]

12.1     Expected…