Australian Hotel Association Seeks Approval from ACCC to Expand Collective Bargaining Arrangements

Australia ( March 03, 2011

Australian Hotel Association Seeks Approval from ACCC to Expand Collective Bargaining Arrangements

Australian Hotel Association Seeks Approval from ACCC to Expand Collective Bargaining Arrangements

The Australian Competition and Consumer Commission has made a draft decision which proposes to allow the AHA Divisions in all states and territories to collectively bargain with a range of wagering, broadcasting and collective licensing service providers (eg Tabcorp, UniTab, Sky Channel, Fox Sports, APRA).

The ACCC has allowed a number of similar collective bargaining arrangements between hotels and providers of wagering and broadcast services dating back to 2003.

However, the ACCC is not proposing to allow the AHA to expand their collective bargaining arrangements to other service providers and suppliers at this time.

The AHA has sought to expand the collective bargaining arrangements to allow it to represent members in their dealings with approximately 130 other businesses that supply the hotel industry (including security service providers, accountants, insurers, banks, caterers and wine, beer and liquor merchants).

“The ACCC is concerned that these broader arrangements span diverse markets, each with unique features in terms of both supply and demand,” ACCC chairman Graeme Samuel said.

“The ACCC has not been provided with sufficient information to allow it to be satisfied that collective bargaining would be in the public interest for these diverse markets.”

According to the AHA its members account for about 75 per cent of hotels nationwide.  In some circumstances the AHA’s members could represent a large proportion of purchasers such that the aggregation of the buying power of AHA members in these markets may result in anti-competitive detriment.

The ACCC has recently granted separate authorisation to two collective bargaining groups allowing them to negotiate with a range of targets. These arrangements differ from the AHA’s current proposal as they involved comparatively smaller bargaining groups.  These two elements were significant in the ACCC’s assessment of the Liquor Stax and TLS proposals.

The AHA’s 2006 authorisation was due to expire on 31 March 2011. The ACCC has granted interim authorisation to the AHA Divisions to allow them to continue giving effect to the narrower collective bargaining arrangements while the ACCC considers the current application.

The ACCC may authorise collective bargaining arrangements when it is satisfied that the public benefit from the conduct outweighs any public detriment. Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

The ACCC now invites comments on the draft determination. The ACCC’s draft determination and information about making a submission will be available from the ACCC website, and by following the links to this matter. Parties wishing to make submissions should do so by Friday, 18 March 2011.

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