April 5, 2016

Australia's cattle sector to be investigated for competition, transparency issues

The Australian Competition and Consumer Commission (ACCC) will be investigating competition, efficiency, transparency and trading issues in the country's beef and cattle supply chain, the Australian Business Review reported.  

A report is likely to come in late November.

"Competition and consumer issues in the agriculture sector are a priority for the ACCC," chairman Rod Sims said.

There is currently a strong demand for Australian agricultural products from China's growing middle class. Beef sales to the country had increased six fold in three years, with close to $1 billion last year, based on data by Meat & Livestock Australia.

According to ACCC, the investigation will focus on saleyard attendees bidding on behalf of multiple buyers as well as examining for impediments against efficiency, such as bottlenecks or market power along the supply chain, and differences in bargaining strength and allocation of commercial risk between producers and buyers.

The transparency of carcass pricing, and share of profits among the cattle and beef production, processing and retailing sectors will also be scrutinised.

ACCC will accept written and oral submissions and hold public forums across Australia, Mick Keogh, commissioner of ACCC, said.

Additionally, a "confidentiality regime" is in place to facilitate submissions and handling of confidential information, including those from anonymous sources.

"We understand that some market participants may fear retribution from commercial partners for speaking to the ACCC. Equally, firms may be reluctant to provide the data we need to understand the complete picture," Keogh said.

- The Australian