News

Abattoir closures must force recognition of unsustainable regulatory costs: AMIC

Beef Central, August 30, 2017

The Australian red meat processing industry’s peak industry council has called on levels of Government and industry to recognise the impact that record input costs, regulatory burden and encumbered market access is having on the industry, following the closure of another processing company within Australia.

As widely reported this week, Churchill Processing in Ipswich will close its doors at the end of September, leaving 500 staff out of work.

Australian Meat Industry Council CEO Patrick Hutchinson said the red meat and pork processing industry faces an “axis of issues” that continues to impact profitability and growth.

“Our sympathies go out to the staff and management of Churchill, “said Mr Hutchinson.

“However, once again, this clearly illustrates our industry continuing to work in the midst of the worst terms of trade in its history.

“The Churchill closure highlights the urgency required for all levels of governments to get serious on regulatory reform.”

Mr Hutchinson said Australian processors were currently experiencing continued trade and management issues on a daily basis, including:

•  Record high livestock prices (current EYCI of 548 cents still 25% above five year average with record of 725 cents occurring in August 2016);
•  Supply constraints;
•  Increasing input costs including energy;
•  An unfavourable exchange rate; and
•  Burdensome and duplicative government oversight

“In addition, an uncertain export trading environment, including technical market access difficulties, is significantly affecting establishments’ viability and profitability,” he said.

China suspensions costing $1m a day

“For example, in relation to the temporary Chinese import clearance suspensions applied to six Australian meat processing establishments in late July 2017, the inability for these establishments to access this valuable market is costing them over $1m a day in combined revenue.

“This has significant flow-on effects to the livestock supply chain, including stock purchasing decisions, establishment operations and number of processing shifts. This impacts the lives of everyday Australians in regional centres.”

“Increasing the cost of doing business through unharmonised regulations between state and federal, as well as potentially introducing new regulations, also continues to plague the industry.

“Talk of introduction of further red tape within industry, rather than its reduction, further hurts confidence.

“The recent senate inquiry into rationalisation in the red meat processing industry has shown the potential to impose further regulations onto an already heavily regulated industry that is completely out of step with government rhetoric on business support in Australia.”

“We work with and support the Red Meat Advisory Council (RMAC) in rejecting not only the baseless accusations of anti-competitive behaviour but also the notion of adding further red tape through potential onerous reporting and auditing of AMIC members and the industry arising from an inquiry without evidence.

“As an industry representing 35,000 full time workers and another 100,000 through multiplier effects (as at Jan 2017), we call on all governments to work with us to improve issues around the cost of doing business, not add to it.”

Source: AMIC

Leave a Reply to Barry Moule Cancel Reply

Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

  1. Barry Moule, September 4, 2017

    Fighting water and electricity costs is one thing. Fighting our own Government Bureaucracy is another. Churchill Abattoir is a domestic plant. We have for the past 17 years supplied most of Woolworths beef in Queensland and N NSW. If our beef is fit for Australians to eat, why isn’t it fit for Japanese, Chinese and European customers ?

  2. Jack Randles, August 31, 2017

    Processors have always had cycles of profit & loss, sometimes like the producer caused through draughts & other climatic conditions. However the various quite costly government interventions on the meatworks supposedly on the behest of importing countries, was & is a burden which no industry should be expected to operate under without some assistance from the governing bodies inflicting these cumbersome regulatory burdens.
    The usual excuse for enforcing further government regulation is invariably the health risk to the buyer of the processed product. Australia’s meat animal population is one of the healthiest in the meat exporting world & any perceived human health risk should be clarified on the farm not in the abattoir. Proper hygienic meat handling not disease control should be the aim of government regulation in the abattoir situation.

  3. John Carpenter, August 31, 2017

    I fear that AMIC is in for some more very bad news.One; the strengthening of the AUD has only just begun and has surprised many of the “experts”.The USD,in my view,has entered into a period of prolonged weakness against all major currencies including the AUD.A retracement to parity is not out of the question.Two;retail electricity prices have doubled in the last twelve years.Both political parties and the NP are now irrevocably committed to the RET and Paris which implies another doubling over the next 12 years.This will be catastrophic for an industry that relies on a refrigerated supply chain.Throw in a unionised workforce and Fair Work and the cost pressures will become unbearable.Meat processing in Australia is a dying, sunset industry.Three,the level of restocking will be far less than predicted by the experts.There will be no big increase in the supply of slaughter cattle.Too many cattle producers have been badly burnt by drought to aggressively push up stoking levels.

  4. Cameron McIntyre, August 30, 2017

    Whilst sympathising with processors experiencing cost squeezes and a massive growth in both Government and self imposed red tape it is very hard not to point out that up until three years ago producers operated under similar conditions for the previous ten years. Processors and producers must pull together to greatly reduce red tape and make State and Federal Govts accept we are not an increasing source of revenue.

Get Beef Central's news headlines emailed to you -
FREE!