Processing

Processors, producers welcome ACCC study

Beef Central, 05/04/2016

PEAK councils representing both beef processors and cattle producers welcomed this morning’s ACCC announcement that the watchdog body will undertake a ‘market study’ into the cattle and beef industry in Australia (see this morning’s separate report).

The Australian Meat Industry Council said it welcomed an independent study, from such a highly respected entity as the ACCC.

steve-martyn-right

AMIC’s Steve Martyn

“It can only be of benefit if they are able to identify the many aspects of what is a very complex supply chain and help clarify any issues,” AMIC national processing director Steve Martyn said.

“Hopefully, an independent study like this will actually remove a lot of the unfounded accusations and misinformation that has circulated earlier, that will be of benefit to the whole supply chain.”

Mr Martyn said with the ultimate demise of the motor vehicle industry in Australia, the meat processing sector was now arguably the largest trade-exposed manufacturing sector in Australia.

“It’s very important to the rural and regional community that we have a viable and sustainable processing business going forward. We’ll be happy to work with the ACCC in whatever aspects of their study that we can assist with,” he said.

Cattle Council supports scrutiny

Cattle Council of Australia president Howard Smith also welcomed the ACCC study, saying that beef producers were becoming increasingly concerned about consolidation in the processing sector.

Howard Smith

Howard Smith

“The new Agricultural division of ACCC has been set-up to ensure markets are working properly, so it will be good to get an independent assessment of the health of the Australian beef market,” Mr Smith said.

“The Australian beef industry believes that market forces should be allowed to occur, as this is integral to the commercial realities of doing business, so we welcome any independent review of the market to ensure it is operating freely,” he said.

In Cattle Council’s submission to the Senate inquiry into the effect of market consolidation on the red meat processing sector, it suggested that:

  • Incentives were needed for new processor entrants
  • The CCA-led reforms to the beef industry language would help provide trust and transparency in the supply chain
  • The industry needed to improve supply chain collaboration between processors and producers to reduce peaks and troughs in supply and demand; and
  • Strengthening of competition law frameworks including introducing a voluntary industry code of conduct would be beneficial.

Cattle Council said it would provide written and oral submissions to the ACCC study and welcomed any producer to contact CCA directly if they wanted to provide confidential information to assist with CCA’s submission.

 

  • Cattle Council’s submission to the earlier Senate inquiry into the effect of market consolidation on the red meat processing sector can be viewed here.

 

 

 

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