Pic source: meatprojects.com.au
BY Anna Vidot
The Australian Meat Industry Council has fronted a Senate inquiry in Canberra to defend processors against claims of collusion and anti-competitive behaviour.
The Senate's Rural Affairs committee is investigating the red meat processing industry, and producers' claims around a lack of transparent pricing information and processor consolidation leading to diminished returns.
The inquiry was sparked after the extraordinary events at northern Victoria's Barnawartha saleyards in February, when processors boycotted the cattle sale over a dispute about when cattle should be weighed.
Meat Industry Council chairman David Larkin told the hearing that his organisation agreed with the Barnawartha processors, that livestock should be weighed post-sale.
Sceptical senators pounced on Mr Larkin's comment that post-sale weighing delivers the best return to producers, because the greater certainty for buyers meant they could be more "bullish" in their bidding.
Committee chairman, Labor Senator Joe Bullock asked if Mr Larkin was really giving evidence "that your motivation was 100 per cent altruistic, and that your only intention was to boost returns to the producer" in lobbying for post-sale weighing.
Nationals Senator Bridget McKenzie asked Mr Larkin to explain why the Victorian Farmers' Federation and NSW Farmers Associations' livestock divisions don't support post-sale weighing, if it delivers higher returns for producers.
Mr Larkin said the Senator would have to ask those organisations.
Undeterred, Senator McKenzie pressed on, asking Mr Larkin to provide the committee with evidence that post-sale weighing delivers better returns to the producers.
"You have sat here Mr Larkin, before our committee, that post-sale weighing gives a better return. So given you stated that, I'm seeking the evidence that you based that statement on, and you can do it on notice, that's fine," Senator McKenzie said.
With Senator McKenzie moving on to collusion and transparency in pricing, Mr Larkin told the hearing that the Meat Industry Council "does not believe there's collusion in the marketplace."
Senator McKenzie said that was "a bit rich" for someone with Mr Larkin's 32 years in the industry to "sit here and say it doesn't happen – at the buyer end or the seller end."
"Senator, our position on that is that if you believe it happens and have the evidence of that, then that's a matter for the law to deal with," Mr Larkin replied.
Asked whether he had any suggestions for improving transparency around pricing, in line with evidence producers have given to the inquiry, Mr Larkin said information about prices is already transparent and readily available for producers.
"I think the issue is people's understanding of those prices," he told the hearing.
"Consignment prices on offer are public knowledge, and I don't know of too many meat companies in the beef industry who don't provide [pricing] grids publicly pre-sale.
"What I can say is that when producers send their product in on consignment, there are considerable amounts of feedback given to the producers based on the outcomes of that consignment and the kill, not only relative to price, but all sorts of quality and carcass attributes.
"In my experience, those producers who have embraced feedback are today reaping the rewards of premiums for supplying a product that the market has asked for an indicated a premium on."
The committee is expected to report back with recommendations in mid March next year.