Provisional authorisation granted for New Zealand Tegel Growers Association to engage in collective bargaining with Tegel Foods
Published25 Nov 2021
The Commerce Commission has provisionally authorised New Zealand Tegel Growers Association Incorporated (TGA) to collectively negotiate on behalf of its members the terms and conditions of its members’ supply of chicken growing services to Tegel Foods Limited (Tegel).
This provisional authorisation allows TGA to commence collective bargaining while the Commission considers the main application relating to the same conduct. This is the first time the Commission has considered an application for provisional authorisation.
Based on the Commission’s assessment of the evidence available at this time, we consider that it is appropriate to grant provisional authorisation. In particular, the Commission considers that the potential benefits of collective negotiation in this case are more likely to outweigh the potential detriments than not. The benefits of collective negotiation include the potential to reduce transaction costs and reach a more sophisticated agreement.
The Commission also considers that allowing this interim arrangement is unlikely to materially affect the market in a permanent way.
A copy of the Commission’s determination will be available on the Commission’s case register shortly.
The Commission continues to consider the TGA’s main application for authorisation of the same conduct. The Commission’s decision to grant provisional authorisation should not be taken as an indication that it is likely to grant (or decline) the main application for authorisation.
Further information about that application is available on the Commission’s case register.
TGA is an industry association. Its membership consists of three regional industry associations. The regional associations represent growers in the greater Auckland, Taranaki and Canterbury regions who supply chicken growing services to Tegel, one of the largest chicken processors in New Zealand. In this way, TGA currently represents approximately 75 growers to Tegel.
Provisional Authorisation requirements The Commission may grant a provisional authorisation under section 65AD of the Commerce Act during the COVID-19 epidemic period in respect of an application for authorisation made under sections 65AA(2) or (3) or 58(1) or (2).
A provisional authorisation has the same effect as an authorisation but is of limited duration and only available while the Commission considers an application for authorisation of the relevant agreement or arrangement. The Commission may authorise all or some of the agreement or arrangement for which authorisation has been sought.
The Commission may grant provisional authorisation when it considers it appropriate. The Commission will consider the urgency of the application, potential benefits and detriments, and the impact on the relevant market amongst other factors when considering whether a provisional authorisation is appropriate. The Commission’s Guidelines on Approach to Authorisations under the COVID-19 Response (Further Management Measures) Legislation Act explain when the Commission may grant provisional authorisation, and our process for determining such provisional authorisation applications.
A public version of the provisional authorisation application is available on the Commission’s case register.