Markets

VFF seeks further ACCC action on Barnawatha

Beef Central, 10/12/2015

The Victorian Farmers Federation has expressed ‘outrage’ at the results of the Australian Competition and Consumer Commission’s (ACCC) investigation into allegations that processors collectively boycotted the first Barnawatha cattle sale in February in protest against the centre’s decision to use pre-sale weighing.

The results of an ACCC investigation into the incident were announced yesterday and found that processors had no case to answer.

An ACCC statement said that, while it was clear processors had communicated about the sale, the evidence did not demonstrate that any of the processors entered an arrangement or reached an understanding not to attend the sale, which was required to establish a breach of the Act.

The VFF Livestock Group says it believes that the nine processors involved “displayed non-competitive coordinated conduct” in not attending the first Barnawartha sale, and said it was disappointed by the results of the ACCC investigation.

VFF Livestock Group president Ian Feldtmann said farming groups will seek further action from the ACCC.

“The Barnawartha incident was the catalyst and showed us that there was no level playing field in the Victorian livestock markets,” Mr Feldtmann said.

“It’s baffling that all nine processors chose not to compete at the saleyards in February, yet the ACCC are unable to obtain sufficient evidence to make a case for prosecution.”

The VFF Livestock Group also questioned the ACCC’s comment that a “there is a fine line between social discussions about industry issues on the one hand, and exchanging information in circumstances that may constitute an understanding between competitors on the other.”

“In our opinion, if it looks like a duck, quacks like a duck and smells like a duck, you can be pretty sure that it’s a duck and there is no fine line on whether or not the duck agreed to be a duck,” Mr Feldtmann said.

Following the Barnawartha incident, the VFF and NSW Farmers called for a Senate Inquiry into the red meat processing sector.

Both groups have stated that a fair market must be underpinned by three key components: price transparency, accountability and an independent governance structure.

“Further, this showed us what happens when you reduce the number and diversity of competitors in a market – you reduce choice. Lack of choice led to the Barnawartha incident, it also led to the way Coles was able to deal with its producers as detailed in the recent ACCC Federal court case.”

“We can fight all we want but at the end of the day there is no regulatory body protecting the rights of producers. We are seeing this time and time again. It always stops with the farmer.”

Mr Feldtmann said current competition law was failing farmers.

“The review of the competition law needs to provide the Agricultural Enforcement and Engagement Unit with sufficient teeth to be truly effective.

“Further, it clearly demonstrates that the agricultural industry has its own unique set of issues and should be treated as such.”

The Senate committee inquiry into the effects of market consolidation in the red meat processing industry is due to hand down its final report and findings and recommendations in March 2016.

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