Provisional authorisation granted for New Zealand Tegel Growers Association to engage

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.

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