Something rotten at the Grocon picket line

Grocon construction workers were expressly opposed to forming a picket outside Myer last year – so who was protesting? It’s time for the competition watchdog to sharpen its teeth.

The Grocon affair raises issues that go to the core of what the Australian Competition and Consumer Commission should be doing in Australia. To what extent should companies be allowed to fund unions and/or their workers to try to destroy opponents and eliminate competition? The answer must be that any such practices must be stopped and if offences have been committed then the offenders should be prosecuted.

The details that I discovered this week surrounding the 2013 Grocon affair indicate that this may well have happened in commercial building. And I fear that what happened in commercial building in the Grocon affair may be just the tip of the competition iceberg. The ACCC urgently needs to examine the Grocon affair and be ready for similar cases in other industries. And the Grocon affair (and any other cases that arise) also needs to be high on the agenda for the Ian Harper review of Australian competition policy. 

Let’s look again at what I revealed earlier this week (Lend Lease's huge task to beat the cartels, July 7). More than 1000 men (and they were men) assembled in the streets of Melbourne blockading the Grocon site in an attempt to stop the Myer development and send Grocon and its subcontractors broke. These are harsh conclusions but they are reasonable given the other steps that were taken, including billboards on the freeway to Melbourne airport blasting Grocon and attempts to starve the company of money.

Normally in disputes of this sort there are issues that mean employees of the target company are in the front line of the protests. That certainly happened in the waterfront dispute. But in the Grocon case there were no Grocon employees -- indeed Grocon employees wrote a letter to newspapers opposing the action in the streets.

So who were the ‘protestors’ and what was their agenda? Some were bikies and some were professional protest people but a vast number came from building sites run by commercial builders who are Grocon’s rivals.

Although I have no direct knowledge, it is London to a brick that Grocon’s rivals were paying their employees to try to destroy a dangerous rival -- or at least force Grocon to join the cartel-style arrangement. 

If, of course, the protestors were not paid by Grocon rivals to take action then it is a different argument. Whether Grocon’s rivals funded the protest must be determined by the ACCC.

The employees of rival builders controlled the streets for some 16 days. It would be hard for workers to protest about a rival company where no employees of that company were involved if rival workers were not receiving any pay.

And we must remember that while there were issues such as safety, the main reason for the protests was that Grocon would not join the cartel-style agreement between the big builders and the big unions to allow unions to control who can be subcontractors -- lowering productivity and increasing building prices by between 15 and 30 per cent. The workers in the street gained nothing.

If (and I repeat if) big builders effectively funded the attempt to destroy Grocon I can’t think of a more devastating anti-competition manoeuvre. 

Traditionally the ACCC has stayed away from industrial areas because they have not wanted to interfere in labour negotiations. Indeed their act also discourages this. 

And so if Grocon employees had been on the picket lines, then legitimately those from other sites were supporting their colleagues. That is the conventional situation and in circumstances like that I would think the ACCC has no need to be involved. But once there are no Grocon employees involved -- indeed they opposed the protests -- it then seems to be an attempt by rival builders to use unions to destroy someone outside their cartel-style agreement. 

If the evidence shows this is what happened then we are into very serious ground. Fortunately the protestors were extensively filmed so a large number of those involved can be identified.

If the ACCC does not exercise its powers under competition law in circumstances like this then there is not much point in having the ACCC. And of course that’s where the Harper Review becomes so important. 

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles