VICTORIAN senator Bridget McKenzie has welcomed Tuesday’s Australian Competition and Consumer Commission decision to investigate the Australian beef and cattle industry.
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The Nationals senator, who pushed for the senate Inquiry into the effect of market consolidation on the red meat processing sector, said all producers should support the ACCC investigation to deliver more transparency to the sector.
“What the ACCC has announced today vindicates the action taken by local North Eastern producers after the Barnawartha Boycott,” Senator McKenzie said on Tuesday.
“That action has resulted in this outcome, and it is a fantastic outcome. I encourage them all to get involved and stay involved.”
Issues raised in the senate inquiry, which began in March 2015, were crucial to the ACCC’s decision to undertake the market study.
The ACCC said it would examine competition, efficiency, transparency and trading issues in the beef and cattle supply chain.
“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,” ACCC commissioner Mick Keogh said.
The ACCC is seeking information through written and oral submissions, and will hold public forums in regional areas to hear directly from interested parties, as well as accepting confidential submissions.
It was expected to announce detailed information on the scope of the study and how interested parties can participate on Thursday.
The dates and locations of the forums would also be announced then.
Its final report was due in late November
Key issues to be covered by the study 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,” ACCC chairman Rod Sims said.
“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.”
Tuesday’s announcement came as Mr Simms was giving evidence at the senate inquiry’s final public hearing in Canberra.
"I'm really very pleased with the response from the ACCC,” Senator McKenzie said.
“They gave us a lot of strong evidence this morning about things we can change in the competition law that, whilst you might not have to prove collusion, you can prove other things that actually lessen competition.
“Such as the wink-wink, nudge-nudge conversations that we know go on
“… If we’re going to get to the bottom of this and give the beef industry the transparency that it needs so that the market can operate effectively and deliver a better farm gate price, which is what we all want, then people have to come forward and give the evidence to the ACCC.”
Senator McKenzie said the committee would present its report “with a raft of recommendations” on May 5.
She would meet with North East Victorian beef farmers this week to discuss the inquiry’s findings and highlight issues likely to be included in the Senate inquiry report.