ACCC 'out of touch' on JBS, says Williams

06 Feb, 2015 10:00 AM
Comments
13
 
I know this decision will be met with dismay and only time will tell whether it is right

NSW Nationals Senator John Williams is seething at the Australian Competition and Consumer Commission’s (ACCC) decision to not oppose the takeover of the Primo Group by JBS Australia.

In a strongly worded statement today, Senator Williams accused the ACCC of being out of touch with market reality.

The decision is likely to cause headaches for the Nationals and Coalition government facing under increasing pressure to implement reforms that will alleviate pressures on livestock producers from constricted supply chain competition.

Senator Williams said the ACCC’s decision to not oppose the proposed $1.45 billion acquisition of Primo was “very disappointing in my opinion”.

He said as part of the review process, he lodged submissions on behalf of concerned people in the livestock industry and their “common worry” was that the takeover would lessen competition at the saleyards.


Read more: ACCC green lights JBS takeover


Senator Williams said the ACCC agreed there was "some lessening" of competition - but then claims "it is not a substantial lessening".

He said the ACCC also claimed Primo wasn’t a strong competitive restraint on JBS and tried to justify the distance of more than 500 kilometres between Primo’s Scone abattoir and JBS’s Queensland abattoirs to support its case.

“This is out of touch with reality because cattle can and are transported many hundreds, even thousands of kilometres,” he said.

“I find it confusing that on one hand the ACCC will not oppose this acquisition, yet in the next breath says it is wary of the potential impact of the further consolidation of abattoirs.

“If that is true, why didn’t it act in this instance?

“From talking with farmers and those in the livestock selling industry I know this decision will be met with dismay and only time will tell whether it is right.”

Keeping an eye on future bids

The ACCC received submissions from “a range of interested parties”, who expressed concern that the proposed acquisition would result in less competition in the fat cattle market in northern NSW and Queensland.

Farmers and meat retailers are increasingly frustrated by consolidation of meat processing activities which are limiting the choice of independent meatworks bidding for livestock or offering service kill options to producers or butchers.

“The ACCC undertook a detailed assessment and determined that Primo is currently not a strong competitive constraint on JBS,” ACCC chairman Rod Sims said.

“Furthermore, the increase in market share as a result of the proposed acquisition would be relatively small and JBS would continue to be constrained in the market for the acquisition of fat cattle by a number of alternative abattoirs and supermarket chains, in the northern NSW and southern Queensland region.”

While the ACCC determined that, in this instance, the proposed acquisition would be unlikely to raise significant competition concerns, the watchdog is wary of the potential impact of further consolidation of abattoirs.

“The ACCC will continue to monitor this industry and any future acquisitions will face additional scrutiny,” Mr Sims said.

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Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
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READER COMMENTS

Jock Munro
6/02/2015 11:26:48 AM

Well spoken, Senator Williams. I bet the Liberals would agree with the ACCC and its text book economics. it is little wonder that the Australian voter is disillusioned and prepared to strike out at the urban political elite that are running the nation.
Paul Cox
6/02/2015 11:55:15 AM

The more potential buyers producers have the better the potential return. It is not the only factor or even the prime one, but it is very important. Why is it that the likes of Teys oppose live export? It is not for the betterment of the industry as a whole. With the danger of an ALP government in Queensland placing further restrictions on the livestock industries it is a character challenging time to even think about further investment in the sector. Does the ACCC come close to understanding the realities of the red meat industries?
Archibald
6/02/2015 12:19:59 PM

The ACCC is just out of touch full stop, and government just sits by and does what, nothing!
Rob Moore
7/02/2015 7:04:58 AM

Disgracefull weak action from ACCC- shut them down and sack them all - at least we are not paying people to sell us out then!
Farmer Brown
7/02/2015 7:14:10 AM

To allow JBS to take over another company in Australia is horrendous. There is little enough competition now. If they want to further expand into Asia why can't they do it in their own name. They buy up Prestigious brand names like King Island beef and then Market it their way. Get real ACCC.
the advocate
7/02/2015 11:22:33 AM

agforce qld should hang their heads in shame - to my knowledge not one peep out of them against it!!
Bushfire Blonde
8/02/2015 8:00:40 PM

JBS's buy out of Primo SHOULD NOT HAVE BEEN ALLOWED. Where are the rest of the National MPs on this issue? - sucking up to the trendy Liberals?
John Hine
9/02/2015 7:34:33 AM

I agree that it is sad to see yet another Aussie food company being taken over. However, why is it that our companies seem to have so little drive? JBS was a family butcher shop 50 years or so ago, in a country with a military dictatorship.
Bushfire Blonde
9/02/2015 7:59:09 AM

The main reason why companies in Australia have too little drive is that the people who run them and the people who are employed by them have never been hungry. Australians in general have had it too good for too long and look what it has led too - the cost of living and conducting a business in Australia has become a global joke all because of lack of drive - "she'll be right mate, the fire will pull up at the next cattle paaaad"!
Meryl
9/02/2015 2:06:19 PM

This Senator seems to be a lone voice in the wilderness. Where are the rest of our elected representatives in there batting for the Aussie company? Too busy navel-gazing in Canberra.
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