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ACCC launches market study into cattle and beef industry

Beef Central, 05/04/2016

The Australian Competition and Consumer Commission has launched a market study into the cattle and beef industry in Australia.

The study will examine competition, efficiency, transparency and trading issues in the beef and cattle supply chain.

In March last year, the Australian Senate commenced an inquiry into the effect of market consolidation on the red meat processing sector. The combination of issues raised through that Inquiry, and the ACCC’s own work, has led to ACCC’s decision to undertake this market study.

Key issues to be covered include:

  • Competition between buyers of cattle, and suppliers of processed meat to downstream customers
  • The implications of saleyard attendees bidding on behalf of multiple buyers
  • Impediments to greater efficiency, such as bottlenecks or market power at certain points along the supply chain
  • Differences in bargaining strength, and the allocation of commercial risk between cattle producers and buyers
  • The transparency of carcase pricing and grading methods
  • Seeking information on the share of profits among the cattle and beef production, processing and retailing sectors
  • Barriers to entry and expansion in cattle processing markets.

“Competition and consumer issues in the agriculture sector are a priority for the ACCC,” commission chairman Rod Sims said in a statement issued this morning.

“The cattle and beef market study is the first of several agricultural market studies that the ACCC will conduct over the coming years. A number of ACCC Commissioners and I will be closely involved in the market study, including at the public forums,” Mr Sims said.

The ACCC is seeking information through written and oral submissions, and will hold public forums in regional areas across the country to hear directly from interested parties. Confidential submissions will also be accepted.

“We understand that some market participants may fear retribution from commercial partners for speaking to the ACCC. Equally, firms may be reluctant to provide the data we need to understand the complete picture,” ACCC’s agriculture commissioner Mick Keogh said.

“Therefore, we have established a strong confidentiality regime to assure interested parties that we will treat any confidential information sensitively.  We will also accept information from anonymous sources,” Mr Keogh said.

The ACCC plans to release an issues paper later this week, which will provide detailed information on the scope of the study and how interested parties can participate. The dates and locations of the consultation forums will be announced on the ACCC’s website next month.

Information collected from submissions and forums will be analysed, and ACCC will publish draft findings for further comment, likely in September.

The ACCC will then release a final report, likely in late November.

The ACCC has been provided with additional funding of $11.4 million over four years to establish an Agriculture Enforcement and Engagement Unit that will conduct investigations and engagement in rural and regional areas. Australian Farm Institute’s Mick Keogh has been appointed agriculture commissioner.

 

  • The Issues Paper and further information on the market study will be available from 7 April 2016 at www.accc.gov.au/agriculture

 

Source: ACCC

 

 

 

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