News

Is progress being made in adoption of ACCC’s meat inquiry recommendations?

Beef Central, 08/03/2018

IT has been 12 months since the Australian Competition and Consumer Commission completed its Cattle and Beef Market Study and released a report with 15 recommendations for the red meat industry to address market competition issues.

So what progress has the red meat industry made in satisfying the concerns raised in the ACCC’s report?

The ACCC wrote to a range of red meat industry stakeholders in late January 2018 stating it is now conducting a review of industry progress toward implementing the recommendations from its report, and will publish a short update summarising where progress has or has not been made. That summary is expected to be made public by April 30.

Senior red meat industry stakeholders have told Beef Central that the commission head, Rod Sims, had recently expressed ‘frustration and impatience’ at the slow rate of progress.

In its letter, the ACCC said that while it believed some progress had been made on certain recommendations, it felt the level of voluntary reform had in general been ‘disappointing’.

ACCC stated when releasing its report 12 months ago that if the industry did not voluntarily address the concerns cited in its report, it would consider compulsory options.

In its letter to industry stakeholders in January, the ACCC said it would consider whether to strengthen its recommendations where progress has been limited.

Industry ‘takes recommendations seriously’

The Red Meat Advisory Council has responded to the ACCC with a letter explaining that the red meat industry has taken its recommendations ‘very seriously’ and has been working proactively to action the issues raised in ACCC’s 2017 cattle and beef market study.

RMAC chair, Don Mackay

In a letter sent to the ACCC, RMAC independent chair Don Mackay said the industry had made progress on 12 of the 15 recommendations.

Of the three not yet actioned, RMAC says one is unworkable and has been identified by the ACCC itself as “complicated”. This relates the recommendation calling for a saleyard buyer register to be developed.

RMAC says the recommendation is not supported by industry, which has urged the ACCC to strongly consider its removal.

On two recommendations – one that price grids should be made publicly available, and another that livestock agent licensing should be consistent across all states – RMAC says it is awaiting advice from the Government and/or the ACCC before progress can be made.

RMAC said it wrote to the Council of Australian Governments Agricultural Ministers Forum (AGMIN) in advance of their last meeting in July 2017 outlining its concerns but received no response, and has also written to the ACCC on several occasions in the past 12 months and has received no response.

The council suggests that to move forward, the ACCC needs ‘agribusiness capability’ with the expertise required to engage with grassroots businesses and fully grasp market dynamics.

It says the ACCC should also subject findings from consultation to fact checking, and use a clear evidence-base to determine policy setting – “not just arbitrary threats of additional regulation via the media.”

RMAC also believes the Agriculture Consultative Committee should be front and centre to the work of the unit. It says red meat industry stakeholders want to see an evidence-based competition policy framework.

 

Background:

In 2016-17 the Australian Competition and Consumer Commission’s Agriculture Unit conducted a market study of the cattle and beef sector. The study examined competition, transparency and efficiency in cattle and beef supply chains. Click here to read Beef Central’s original story on the recommendations, and click here to read about industry reaction.

In its final report published in March 2017, the ACCC made some recommendations on certain long-standing and industry accepted practices. It found that significant gains could be achieved through improvements to information flows and transparency, with the market study providing an opportunity for meaningful improvements to be made to the cattle and beef supply chain.

A number of recommendations were made in the March 2017 report with the aim of bringing about those improvements. The full ACCC report including its recommendations can be viewed here.

The ACCC Agriculture Unit is now conducting a review of industry progress toward implementing these recommendations. A short update report on progress is expected by April 30 (some industry sources have reported the deadline as March 31, which ACCC confirms is incorrect).

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Comments

  1. Michael Walker, 10/04/2018

    Agree, there is an element of negotiation with direct sales and grids can get complex, but producers are smart enough to understand the subtle differences in grading and call up if they need clarifying. Putting them up on the web would be a good first step in responding to all this ACCC pressure, but there’s no doubt we’re not seeing much progress.

  2. Mark Fenton, 06/04/2018

    Totally agree with last comment. What can be so dufficult in making the price grids publicly available..put them on the web!!!

    We’ve asked the same question of processors over the years, Mark. The consistent message we get back is that there is a wariness, because it’s not like comparing apples with apples.
    Subtle differences occur between competitors grids, in weights, the size of penalties, and tolerances for other criteria that make direct comparisons difficult. We’re convinced that’s not done to be obstructive, or to deliberately cloud matters, but to reflect commercial trading operations. The processors feel they need to engage with the potential supplier on these points first-hand, rather than just anonymously sending out a grid. Editor

  3. Michael Walker, 14/03/2018

    RMAC seems to be a bit of a toothless tiger with these recommendations (although some of them are pretty onerous). As a medium-sized cattle producer in NSW, I personally have seen no progress at our level since the ACCC report came out. The most important one for me at least is public grids. What sort of advice from the government is RMAC hoping to receive with making price grids publicly available? Its just odd that the industry is digging its heels in with that recommendation, all RMAC has to do is tell processors to put them on their website, and then all our lives would be made a whole lot easier.

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