April 16, 2008

Australians pay more for their beef
 

Australian consumers pay A$3 to A$4 billion each year for their beef, which is almost double the amount American consumers do, according to the Australian Beef Association (ABA).

While beef in Australia is more expensive than in the US, Australian beef producers get 20 to 30 percent less for their cattle, said ABA Director John Carter to the Australian Competition and Consumer Commission (ACCC).

Retail and farm gate prices in the US, UK and Australia were compared in the price data.

Choice Grade steaks in the US sell for A$13.82/kg, while an equivalent steak in Australia is priced A$28. Lean mince in the US costs A$7.40 compared with A$14 in Australia.

Data from the UK and Ireland support the mark-up between farm gate and retail in Australia.

Cattle prices in the UK are 77 percent higher than in Australia. In the UK, steak is only 21 percent more expensive but mince is 21 percent cheaper, than in Australia.

The mark-up between the farm gate and retail emphasises technical inefficiency and the market power of the supermarkets to dictate prices to their suppliers.

According to Carter, an efficient meat chain will deliver a favourable outcome for all parties with lower retail prices and higher livestock prices.

(As of April 16, US$1 = A$1.08)