The Australian Competition and Consumer Commission has today announced that it will commence a market study into the cattle and beef industry in Australia.
The study will examine competition, efficiency, transparency and trading issues in the beef and cattle supply chain.
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 carcass 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,” Mr Sims said.
The ACCC is seeking information through written and oral submissions, and will hold public forums in regional areas across the country to hear directly from interested parties. The ACCC will also be accepting confidential submissions.
“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,” ACCC Commissioner Mick Keogh said.
“Therefore, 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,” Mr Keogh said.
“The ACCC will release an issues paper later this week, which will provide detailed information on the scope of the study and how interested parties can participate. The dates and locations of the consultation forums will be announced on the ACCC’s website next month,” Mr Keogh said.
The ACCC will analyse information collected from submissions and forums and will publish draft findings for further comment, likely in September.
The ACCC will then release a final report, likely in late November.
The Issues Paper and further information on the market study will be available from Cattle and beef market study 2016-17.
Background
The ACCC has been provided with additional funding of $11.4 million over four years to establish an Agriculture Enforcement and Engagement Unit that will conduct investigations and engagement in rural and regional areas.
On March 18 2015, the Australian Senate commenced an inquiry into the effect of market consolidation on the red meat processing sector. The combination of issues raised through the Senate Inquiry and the ACCC’s own work has led us to undertake this market study.