Members give MLA overwhelming mandate

Jon Condon, 18/11/2011

Former ABA president John Carter proposed the motion to wind-up MLAWhile the winds of change may be blowing across the red meat structural landscape, Meat and Livestock Australia was given a strong mandate to continue in its current role as the industry’s service delivery company during this year’s Annual General Meeting in Longreach yesterday.

A motion to wind-up the producer-owned company put by the Australian Beef Association received only 10.39 percent support from members, with 89.61pc opposed.

The result was a resounding defeat for ABA members, who gained about 15pc support from members last year with exactly same resolution. While there is a clear mood for structural reform across both conservative and liberal ends of the industry membership spectrum, stakeholders clearly do not see dismantling MLA as being an appropriate part of that process.

In proposing the motion, which asked that MLA be wound-up before December 2012, ABA former president John Carter said any industry structure should alter if the needs of its members altered.

“We saw the old Australian Meat Board wound-up, to be replaced by the AMLC/MRC, and we saw them wound-up to be replaced by MLA,” he said.

“This need for change is built into MLA’s articles of association. It was envisaged that change would be needed, and MLA would be superseded.”

“Thirteen years after MLA was established, we have an entirely different industry. We now have more than 50pc of processing capacity in the hands of two multi-national companies, with sales offices all over the world.”

Mr Carter said more than 50pc of domestic retailing was held by two supermarket groups, with the highest mark-ups in the world giving Australian consumers some of the dearest beef in the world. Meanwhile the producers who funded MLA got some of the lowest livestock prices and share of the consumer dollar in the world.

“Over 13 years, voluntary membership of state farm organisations has virtually collapsed. There has been disillusionment at their performance, and two incidents over the past two years typify that – the Indonesian live export ban, and the risk of importation of beef from the US, supported by the CCA and other bodies before a few concerned people, with the assistance of the Senate, that managed to stop it,” Mr Carter said.

“Brazil has no MLA equivalent, yet has beaten us on both price and export volume. The US beef producers pay a fraction of what we pay, and yet they get much more money that we do, and they are again taking back their share of world markets.”

“We’re in big trouble in Australia with costs. JBS pointed out in a recent article (see Beef Central’s exclusive article "Controlling costs key to JBS export competitiveness") how uncompetitive Australian processing is against global competitors.”

Mr Carter conceded that ABA did not expect its resolution to be carried, but described it as a signal – as it was at last year’s AGM in Launceston – for a full review of industry structure.

Speaking against the resolution, Cobar NSW beef producer Sam Gunn said while there was an appetite for change within the industry, to disband and wind-up the MLA company was not part of the solution.

“The changes that have to be made over the next 12 to 18 months are going to take a lot of work, and the opportunity is there now for all groups to sit down, bringing their ideas and views to the table, and work this thing out.”

ABA president Brad Bellinger said the motion was all about how well MLA as an organisation was performing, and how well the industry structure was performing.

“If you do an audit of the performance of the Australian industry structure and compare it with others around the world, it tells a terrible tale. The Irish Farm Journal publishes a calculator or world beef prices from 11 major beef producing nations. We were running second; we’re now last.”

“Australian steer prices are currently around $2/kg, while in the US, the figure is $3. In dressed weight comparisons, Australia $3.60, Brazil $4. In the past ten years, the cattle price in Australia has hardly moved, while the price of beef at retail has gone up 50pc. It’s obvious that the money producers are giving to MLA has been passed through the system, captured predominantly by Coles and Woolworths,” Mr Bellinger said.

“We have to stop this happening.”

Rolleston, Central Queensland beef producer Ian Robertson said while there was a mood for change, that “did not simply mean going out and shooting the whole bloody lot.”

Injune (Qld) beef producer Justin McDonald described the sequence of AGM challenges put forward by ABA each years as being like “Groundhog Day”.

“Our industry is better than this. It’s time we move on, and we should not keep seeing levy dollars put forward by the rest of industry spent dealing with these types of resolutions.”

The ABA’s voice as an ‘alternate’ producer lobby on issues like structural reform and MLA governance has been somewhat diluted this year by the emergence of other reformist lobby vehicles including the United Beef Group and the Australian Meat Producers Group.

At the conclusion of the AGM, chairman Don Heatley said he was grateful for the continued support from members over the past few years, and it was time for the industry to come together.

“I thank MLA members and the industry for the enormous support that they have shown the company. It is now time to work together as an industry and look to the future,” he said.

“MLA will now get on with the job of creating opportunities for cattle, sheep and goat producers through the delivery of marketing and R&D services.”


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