By Andrew Starke

A collective bargaining arrangement proposed by Liquor Stax Australia is one step closer to realisation after the Australian Competition and Consumer Commission (ACCC) approved the deal in principle.

Last month (August), the retailer was granted interim approval from the regulator to collectively bargain with a range of wholesale suppliers on behalf of its members.

Liquor Stax is seeking authorisation, on behalf of a group of around 200 small businesses comprising liquor merchants and hotels, to collectively bargain with around 60 wholesale suppliers of inputs such as alcohol, cigarettes, poker machines and confectionery as well as services such as advertising, insurance and communications.

The ACCC is prepared to grant a five year authorisation period pending feedback from the industry.

“The ACCC considers that the collective bargaining arrangements are likely to result in public benefits by providing Liquor Stax members with greater input into the terms and conditions of supply contracts,” said the regulator in a statement on its website.

“In addition, suppliers and members are both likely to experience transaction cost savings as a result of reducing the number of parties to negotiations.”

Liquor Stax general manager, Guy Bohan, told TheShout that once the final authorisation is given by the ACCC, its agreement will allow Liquor Stax to further maximise buying potential across liquor and non-liquor suppliers.

“Liquor Stax is a 100 percent guaranteed ‘Not for profit’ organisation, therefore all of these savings will be passed on to our retailers and hoteliers to assist them remain competitive and to achieve better margins everyday,” he said.

Participation in the collective negotiations is voluntary for all parties and does not impose any restrictions on a member's choice of suppliers. The ACCC proposes to grant authorisation for five years.

“The ACCC may authorise this type of arrangement when it is satisfied that the public benefit from the conduct outweighs any public detriment,” said the statement.

“Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974.”

The ACCC now invites comments on the draft determination.

Parties wishing to make submissions should do so by September 22, 2010.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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