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Beef sectors react to ACCC beef and cattle market study

James Nason, March 8, 2017

The Australian Competition and Consumer Commission yesterday released 15 recommendations which it believes will help to deliver greater transparency in Australian cattle and beef markets.

Industry groups are still digesting the detail, but initial reactions have been mixed:

RED MEAT ADVISORY COUNCIL:

The Australian Competition and Consumer Commission wants the Red Meat Advisory Council (RMAC) to assume responsibility for ensuring each sector of the cattle and beef industry voluntarily adopts the 15 recommendations included in its report yesterday.

Asked if this is consistent with its role, RMAC said that was a question for the ACCC which had drafted the report. It told Beef Central it is still considering the ACCC’s recommendations and will respond in due course.

It did however release a more general statement at the same time the ACCC report was released:

The Red Meat Advisory Council (RMAC) in partnership with their Member Councils has today welcomed the release of the Australian Competition and Consumer Commission’s (ACCC) Beef Cattle Market Study (the Study).

RMAC’s membership represents the whole of supply chain for beef, goatmeat and sheepmeat from pre-farm gate to post-export. This includes producers, processors, lotfeeders, retailers and butchers as well as boxed product and livestock exporters.

“The 15 recommendations in the Study acknowledge the range of improvements already underway to improve competitiveness within the beef cattle supply chain; and provide suggestions for pathways forward for a more competitive environment for red meat and livestock as whole,” said RMAC Independent Chair, Mr Don Mackay.

The Red Meat Advisory Council acknowledges the recommendations within the Study and will consider them carefully to see whether they can be progressed to create benefits back to individual Australian red meat and livestock businesses.

RMAC and our Member Councils are focussed on the forces that shape our industry and will respond to the Study in due course.”

AUSTRALIAN MEAT INDUSTRY COUNCIL:

 “We are in receipt of the recommendations and together with industry are reviewing them to see the impacts and options for further development,” said AMIC chair Lachie Hart.

 

CATTLE COUNCIL OF AUSTRALIA:

Cattle Council of Australia president Howard Smith released the following statement:

We welcome the Australian Competition and Consumer Commission’s final report into the cattle and beef sector and acknowledge the significant consultation with the beef industry that was undertaken by the ACCC.

Cattle Council has been engaged throughout the review period and provided significant feedback on the draft recommendations – particularly regarding existing policy positions and the relevant work already being undertaken by Meat and Livestock Australia at our direction.

When the draft report came out we said the report put the focus back on producers, their needs to run profitable farm businesses and the issues holding the beef industry back.

This emphasis on producer benefit has been reflected again in the final report and recognises several areas in which Cattle Council have advocated strongly.

We have driven the move towards objective carcase measurement and value-based marketing and pushed for more producer education regarding understanding carcase feedback, price grids and market trends.

Cattle Council are reviewing the final report and recommendations in detail and look forward to working with the Red Meat Advisory Council and other industry bodies to ensure the recommendations deliver benefits to the Australian beef cattle industry.”

AUSTRALIAN LIVESTOCK AND PROPERTY AGENTS ASSOCIATION:

ALPA CEO Andy Madigan said the recommendation to establish a mandatory public buyers register at each sale, and to report post-sale which buyers bought what, would achieve nothing, apart from impinging on the privacy of buyers.

“A buyers register to be made public is against the law in most states for real estate so the auction system for everything should be the same, not different to a species.

“Our policy is terms must be displayed.

“Why should beef be different to every other public auction system, in that we have to put up a public register? Why would we do a different type of auction just for cattle, when there are also public auctions for horses, goats, sheep, pigs, property, fine art, jewellery, cars.

“For us to change the whole rules and regulations of the auction system just to suit cattle is madness.”

Reporting after a sale that one buyer bought 200 cattle during a sale told producers nothing of value, he said, because that buyer might not come back next week.

He also asked where all the convictions were that proved there was a problem that needed to be solved. “Where are all the convictions for all the wrong doing in the market place that demonstrates there is a major problem here? Where are the convictions, how many people are they finally investigating, is it 100, is it 10, is it three? I think they are investigating three, so if it is just three after so many years, it shows there is nothing wrong.”

MEAT & LIVESTOCK AUSTRALIA:

MLA released a statement today saying it is committed to further action on ACCC recommendations:

Meat & Livestock Australia (MLA) will continue to support improvements in transparency and competitiveness within the red meat industry by further enhancing its market reporting and prioritising objective carcase measurement technology.MLA Managing Director Richard Norton made the commitment following the Australian Competition and Consumer Commission’s (ACCC) release of its ‘Cattle and beef market study’ final report.

Mr Norton said MLA would work through those recommendations that were within its remit in consultation with industry, noting the ACCC’s view the Red Meat Advisory Council should be responsible for overseeing their implementation and monitoring compliance.

“The ACCC has provided a range of recommendations for the industry’s attention and acknowledges progress to date, however the report makes its clear there is more to do,” Mr Norton said.

Amongst its 15 recommendations, the ACCC report welcomes improvements made by MLA to its market information services and notes that MLA’s ability to continue to improve its reporting will depend on the information provided to it by live exporters, processors and retailers.

The ACCC report also welcomes the moves made by MLA to introduce objective carcase measurement technology throughout the industry, and supports MLA’s proposal that the data it produces should be shared for the benefit of the industry.

“As a service provider to red meat and livestock producers, MLA is committed to working with industry to continuously improve our market reporting and insights services to provide the most comprehensive, timely and professional information,” Mr Norton said.

“The importance of improved information was recognised in the Meat Industry Strategic Plan 2020 and is a key support for the shift to value based marketing.

“The recently upgraded Prices & Markets section of MLA’s website now offers a greater variety of market information. This is in response to producers’ appetite for easier access to information and the opportunity to carry out simple, yet in-depth analysis of that data.

“Our peak industry councils are currently also considering MLA’s proposal to fast track the adoption of DEXA objective carcase measurement technology across the red meat industry.

“That initiative would pave the way for scientific measurement of saleable meat yield, future value based marketing and industry-wide productivity gains through processing automation, genetic improvement and data-based on-farm decision making.”

To access MLA’s new prices and market reporting service click here

To find out more about MLA’s proposal to fast-track OCM technology, click here

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