2
INTRODUCTION ..........................................................................................................................3
DETERMINATION ........................................................................................................................3
BACKGROUND ............................................................................................................................4
ASSESSMENT PROCEDURE...........................................................................................................6
PROPOSED ARRANGEMENT.........................................................................................................7
HOW WE ASSESS AUTHORISATIONS DURING AN ‘EPIDEMIC PERIOD’ ...........................................8
STATUTORY FRAMEWORK ............................................................................................................ 8
Jurisdictional threshold........................................................................................................................ 8
Public benefit test ................................................................................................................................ 9
JURISDICTION .............................................................................................................................. 10
Section 65AA – Has the Commission received an application during the epidemic period?.............. 10
Section 65AA – Does the Proposed Arrangement contain a cartel provision? .................................. 11
Section 58 – Will the Proposed Arrangement lessen competition? ................................................... 11
Authorisation of agreements with Tegel ........................................................................................... 12
RELEVANT MARKETS .................................................................................................................13
TGA’S SUBMISSIONS.................................................................................................................... 13
OUR ASSESSMENT....................................................................................................................... 13
WITH AND WITHOUT THE PROPOSED ARRANGEMENT...............................................................14
THE SITUATION WITH THE PROPOSED ARRANGEMENT ............................................................. 14
TGA’s submissions.............................................................................................................................. 14
Tegel’s submissions............................................................................................................................ 15
Our assessment.................................................................................................................................. 16
THE SITUATION WITHOUT THE PROPOSED ARRANGEMENT...................................................... 19
TGA’s submissions.............................................................................................................................. 19
Tegel’s submissions............................................................................................................................ 19
Our assessment.................................................................................................................................. 20
OUR ASSESSMENT OF BENEFITS AND DETRIMENTS ....................................................................21
GENERAL OBSERVATIONS ........................................................................................................... 21
APPLYING THE PUBLIC BENEFIT TEST WHERE BENEFITS AND DETRIMENTS HAVE OCCURRED
UNDER PROVISIONAL AUTHORISATION...................................................................................... 22
POTENTIAL BENEFITS AND DETRIMENTS .................................................................................... 24
AVOIDED TRANSACTIONS COSTS ................................................................................................ 25
Submissions on [
Our assessment of [
] costs......................................................................................................... 25
] costs.................................................................................................... 26
Submissions on avoided ongoing transaction costs........................................................................... 27
Our assessment of avoided ongoing transaction costs...................................................................... 31
MORE EFFICIENT CONTRACT TERMS........................................................................................... 34
Submissions on more efficient contract terms................................................................................... 35
Our assessment of efficient contract terms ....................................................................................... 37
POTENTIAL IMPACT ON THE BALANCE OF BARGAINING POWER............................................... 38
Submissions on bargaining power imbalance.................................................................................... 39
Our assessment on the imbalance of bargaining power ................................................................... 42
EFFICIENCY IMPACTS OF INCREASED BARGAINING POWER FOR GROWERS.............................. 44
Submissions on efficiency impacts..................................................................................................... 45
Our assessment of efficiency impacts................................................................................................ 50
WEALTH TRANSFERS ................................................................................................................... 55
Submissions on wealth transfers ....................................................................................................... 56
Our assessment of wealth transfers .................................................................................................. 57
BALANCING OF BENEFITS AND DETRIMENTS.............................................................................. 58
LENGTH OF THE PROPOSED AUTHORISATION ............................................................................60
ATTACHMENT A: IMPACT OF HIGHER [
] GROWER FEES.........................................................61
4461240