The proposed authorisation allows Seedvise, as an agent for royalty managers, to enter into collective negotiations with individual grain buyers. It provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010 (Cth).
The ACCC notes that breeders typically distribute their variety to grain farmers on the condition the farmer pays the breeder a royalty on each tonne of the variety harvested by that farmer harvests, i.e. an end point royalty (EPR). The breeders appoint royalty managers to monitor and collect the EPRs.
Grain buying companies can collect EPRs but are under no obligation to do so and will only participate if royalty managers can provide them with sufficient incentive.
ACCC Commissioner Dr Jill Walker comments that
Collective negotiation by Seedvise will allow grain buyers to deal with multiple royalty managers on the same terms, greatly reducing the grain buyers’ administrative cost of participating in EPR collection.
The authorisation will improve the efficiency and effectiveness of the EPR system by reducing costs for royalty managers and farmers, increasing EPR collection rates, and allowing plant breeders to focus more resources on breeding new and more productive varieties.The ACCC is proposing to grant authorisation for five years.