The six-month study by the Australian Competition and Consumer Commission (ACCC) said it had received allegations of “collusive and anti-competitive behaviour” in saleyard auctions of live cattle.
“The ACCC’s interim report has identified serious shortcomings in current price reporting and the independence and auditing of carcase grading, and concerns about cartel and other conduct affecting competition in saleyard auctions,” said ACCC chair Rod Sims in a statement.
Australia’s competition watchdog claimed the prices of many cattle payments were inaccurately reported. This prevented smaller buyers and producers from having access to crucial data they needed to check if payments were in line with market averages. The ACCC also expressed “concern” about carcase grading at abattoirs, something the Australian Beef Association has been critical of in the past.
“Integrity and trust in the grading system are essential, given its role in determining payments and signalling the demands of the market to many producers,” said ACCC commissioner Mick Keogh. Grading concerns include whether the current framework ensures absolute integrity of the grading process.
“Additionally, we are concerned there are features of saleyard auctions which make them susceptible to anti-competitive behaviour,” Sims added. “During the course of this market study, we have heard specific allegations of cartel and other anti-competitive conduct involving saleyards, which the ACCC is now assessing separately.”
A string of 14 recommendations have been made by the ACCC with a view to stamping out collusive conduct and anti-competitive behaviour. These include: adopting objective carcase grading; making improvements to the nature and coverage of market price reporting; and implementing measures to make cattle trading fairer.
ACCC’s 14 recommendations:
1) Processors and major cattle buyers should make price grids available in a timely manner
2) Buyers should look at improving price grids
3) Meat & Livestock Australia should improve its market reporting
4) All meat boards should work together to expand data collection and reporting
5) Mandatory reporting of non-saleyard transactions and prices is not needed
6) Objective carcase grading technology should be introduced
7) Dispute resolution for over the hook (OTH) sales should be improved
8) Implement a robust audit system for carcase grading
9) Consider improving carcase grading feedback
10) Implementation of a public Buyers Register database
11) Publish terms of sales at auctions
12) Reporting of saleyard buyers
13) Introduce a law to enforce livestock agents are licensed
14) Government help to consider and implement the above recommendations
Recommendations will ‘benefit’ sector
The Cattle Council of Australia (CCA) has welcomed the interim report, praising the recommendations made to improve transparency in the beef sector.
“Cattle Council will take its time to consider the draft report and its recommendations carefully. However, at first glance, many of the recommendations align with key policies Cattle Council is pushing for and we believe will benefit the whole of industry,” said CCA president Howard Smith in a statement.
“The ACCC have recommended the industry move to objective carcase measurement as soon as possible, which would provide benefits for both producers and processors, and create efficiencies across the supply chain.”