Cattle Council of Australia has warned recommendations made in the interim Senate report into the red meat processing sector need fine-tuning.
The interim report was released today by the Senate Standing Committees on Rural and Regional Affairs and Transport, with a final report due in December.
Among the recommendations was for Meat & Livestock Australia, in co-operation with the livestock and red meat industry, to establish a national price disclosure and reporting system.
Cattle Council chief executive officer Jed Matz said Council supported a greater flow of information and transparency throughout the beef value chain.
“But Cattle Council is concerned the Senate committee believes it can direct Meat & Livestock Australia to implement government recommendations,’’ Mr Matz said.
“MLA is a producer owned company and will be directed by Cattle Council and its other peak councilsvia the Red Meat Industry Strategic Plan.
“As such, if the senate committee is looking to the industry to implement their recommendations then industry must be left to drive and dictate the development of systems.
“This will ensure industry can come up with cost effective solutions delivering real results.’’
The terms of reference for the inquiry included the potential misuse of market power through buyer collusion, the impact of the red meat processor consolidation on market competition, existing selling structures and processes at saleyards and the regulatory environment covering livestock.
Public hearings were held during 2015 at Roma, Canberra and Albury.
Cattle Council of Australia’s submission to the inquiry was one of almost 100 received by the Senate committee from individuals, industry stakeholders and peak bodies.
CCA has advocated for key areas of reform, including a reformed beef industry language, greater transparency through the supply chain, realigning political power afforded the processing sector, strengthening foreign investment policy and competition law frameworks.
A study commissioned by CCA is underway by Meat & Livestock Australia to analyse options for increasing price transparency, including the benefits and costs of introducing mandatory price reporting arrangements.
Mr Matz said industry change was already underway with the introduction of the effects test within the Competition and Consumer Act, and the formation of the ACCC Agricultural and Engagement Unit.
He said Cattle Council supported changes to competition law to improve market place fairness for all parties.
“This was a major recommendation of CCA’s submission to the original inquiry and also the current ACCC beef market study.
“Beef price transparency, as it applies to wholesale, retail and export markets, is assessed to be unacceptably low from a cattle producer’s perspective.
“Council wants to ensure greater transparency across the whole beef value chain.
“This information flow will be essential in the future as the industry drives towards value based marketing.
“It is essential the recommendations are industry driven to ensure an effective system can be developed enhancing transparency but not imposing undue costs on producers.’’
Mr Matz stressed the report was an interim one and Council looked to further influencing the Senate committee’s final report due in December.
“Specifically, we will look to push for greater reference to the need for implementing changes to the Australian beef language,’’ he said.
“Improving the language will help to underpin transparency within the supply chain.’’