Australian beef council hails ‘important’ report

By Oscar Rousseau contact

- Last updated on GMT

The report said there is no 'economic justification' for tighter competition laws on beef
The report said there is no 'economic justification' for tighter competition laws on beef

Related tags: Meat

Cattle Council of Australia (CCA) CEO Jed Matz has welcomed a report from the Australian Meat Processor Corporation, which assessed the dangers of tighter competition laws. 

The CCA represents the interests of all cattle producers Down Under. Reacting to the report from the Australian Meat Processor Corporation (AMPC), published on 22 August, he said it gave a good insight from one angle of the red meat industry.

The report commissioned by AMPC provides an important point of view from the processing sector of the beef supply chain.
 
No doubt the Australian Competition and Consumer Commission (ACCC) will consider AMPC’s report along with all the submissions to the beef and cattle market study, to provide a balanced and comprehensive review of the supply chain.

Whilst the AMPC report focuses mainly on competition in the beef industry and how it affects price, the ACCC study is also looking at transparency and efficiency in the supply chain – along with other ways to improve the supply chain for all participants.​”

The report’s key findings

  1. Healthy competition for livestock from both processors and buyers exists
  2. There is no evidence of buyers abusing their power to exploit producers
  3. Innovation by processors helps offset financial setbacks and accelerates demand
  4. Regulation costs hold Australia back from being more internationally competitive

No ‘justification’

The far-reaching report from the ACCC​ was commissioned by Australia’s government after a 2015 senate inquiry was tasked to assess allegations of collusion in the Northern Victoria Livestock Exchange – the largest livestock market in Victoria.

Part of the ACCC study included the report commissioned by the AMPC​ that was welcomed by Matz. Dr Selwyn Heilbron, a senior business and economics consults, wrote the AMPC-commissioned report and concluded there was no “economic justification​” for increased regulation on beef competition.

The final report from the ACCC on Australia’s red meat industry is due to be published in late November 2016.

Related topics: Australia, Livestock, Beef

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1 comment

Australian Cattle Industry Representation

Posted by Rod Dunbar - Director, United Stockowners of Australia,

Your assertion "CCA represents the interests of all cattle producers Down Under" is incorrect - CCA is a Prescribed Industry Body under Australian Federal Law and is appointed by Government to represent Cattle owners - that has been the Law since 1997 - The cattle producers nationally have deserted CCA because of there being no independence of CCA it is primarily funded by the Federal Government, it has much less than 400 direct Cattle producer members out of a group of approx. 200,000 producers.
Of course CCA supports the AMPC as it is also another Prescribed Industry Body part of a governing authority (like CCA), under a Federal law, called MISC (Meat Industry Strategic Council) all of which is funded by a Federal Tax on all cattle sold by producers, not processors.

The Heilbron report’s key findings are a shameful misrepresentation of the facts;

1. Healthy competition for livestock from both processors and buyers exists

So there being only two main processors nationally which have 90% of the processor capacity is "healthy competition"!!

2. There is no evidence of buyers abusing their power to exploit producers

So what about the "lot splitting" that occurs every day atmarkets nationally, where one buyer is buying for several processors on commission!!!! and then splitting lots into different destinations where there should have been several competing buyers in the first instance

3. Innovation by processors helps offset financial setbacks and accelerates demand

The R&D that the Processors are applying to gain their offsets are paid for by the Producers by the cattle tax and managed by MLA (Meat and Livestock Australia), a Federal Government Agency, totally controlled by the members of the AMPC and the AMIC (Australian Meat Industry Council)

4. Regulation costs hold Australia back from being more internationally competitive

The two main processor companies are foreign owned and pay very little Tax in Australia and the practise “Transfer Pricing” so the profit is made offshore – the costs they speak of are production costs and they seek to lower the purchase price of cattle nationally to make the producers pay for the increased cost of processing.

Live Export is the only competition that exists in the market in Australia and the Processors are attempting to have that regulated to decrease the numbers exported in a protectionist move that will lower the market prices of cattle by at least 50%, if it succeeds.

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