Live Export

ALEC and LiveCorp court merger

James Nason, April 30, 2019

IN a possible foreshadowing of broader red meat industry reform to come, two key live export industry bodies are preparing to merge into one.

ALEC chair Simon Crean

At a meeting in Perth earlier this month, the boards of the Australian Livestock Exporters Council and Livecorp agreed that the concept of merging the two bodies had merit and warranted further investigation.

The Australian Livestock Exporters Council is the peak industry policy-setting council representing livestock exporters, and Livecorp is the livestock export industry’s research and development organisation, funded by compulsory levies paid by exporters on every head of livestock they export.

The merger concept was considered by both boards after exporter views were canvassed and revealed strong support for “the significant efficiencies that could be gained” from a possible merger.

LiveCorp CEO Sam Brown and chair Terry Enright

The idea of merging peak industry councils and levy funded service providers in the red meat industry to reduce duplication and streamline policy and levy-spending decisions is a central reform option currently being considered across the entire red meat sector as part of a review of the red meat industry Memorandum of Understanding.

The MoU defines the roles and responsibilities of red meat industry bodies and their relationship with Government, which also funds industry R&D.

At a meeting on April 16 the ALEC board agreed that a merger of the functions of ALEC and LiveCorp should be further investigated, regardless of the outcomes of the red meat MOU review process.

The board identified several potential benefits including:

  • Increasing the ability to promote industry-wide adoption and commercialisation of R&D;
  • Likely greater mechanisms to promote/enforce industry standards;
  • Positive impact on industry’s ability to pre-empt emergent issues;
  • Positive impact on industry’s ability to respond to crises or manage issues;
  • Streamlined governance arrangements which are agile, easily understood and have broad industry buy in; and
  • Clearer roles and responsibilities.

The following day the LiveCorp Board considered the merger issue and also acknowledged the concept had value based on:

  • The size of the industry;
  • The common memberships between the organisations;
  • The strategic alignment of the organisations, and specifically their dedicated focus in providing a position representing livestock export (which, as identified in the Green Paper represents a distinct risk within the red meat supply chain);
  • The relationship between the organisations is very strong, and there would be willing participation from both ALEC and LiveCorp and the majority of their members in this model; and
  • This proposed option encompasses the advantages of the red meat reform Green Paper reform options three and four, which speak of the potential for PICs and service providers to merge.

LiveCorp said it believed the merger proposal must also include direct matching funding for research and development activities within the new livestock export merged entity.

In recent years the Federal Government has resisted calls by cattle producers and Senate Inquiries to create a new grassfed cattle industry organisation that would effectively combine the sector’s peak industry council with the levy-funded functions of the industry service provider Meat & Livestock Australia, on the grounds there should be clear separation between industry advocacy activities and compulsory levy funding.

However there are already precedents for a similar merger to that being proposed by ALEC and LiveCorp in Australian agriculture in the horticulture, pork and egg sectors.

However, this current review represents the ideal opportunity for a new body for the live export industry to be considered to work in line with a revitalised body charged with representing the interest of the entire red meat supply chain.

Both ALEC and LiveCorp have stated further work is required to develop the ALEC/LiveCorp merger ‘option’ before the concept could be formally agreed to and implemented.

David Galvin and Simon Crean.

Further strengthening the existing links between ALEC and LiveCorp was a vote by exporters at this month’s Perth meeting to appoint immediate past LiveCorp chairman David Galvin to the ALEC Board.

The temporary appointment, which will expire at ALEC’s AGM in Townsville in October, is designed to assist ALEC progress organisational and industry changes in the coming months by drawing on Mr Galvin’s extensive industry and governance experience.

ALEC CEO Mark Harvey-Sutton said the livestock export industry was small and ALEC and LiveCorp shared essentially common memberships, so it was appropriate to investigate the potential for a merged service provision and representative organisation.

The current MoU review represented the ideal opportunity for a new body for the live export industry to be considered, to work in line with a revitalised body charged with representing the interest of the entire red meat supply chain, he said.

 

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